Prominent hedge fund managers on Tuesday criticized President Obama's decision not nominate Larry Summers to be chairman of the Federal Reserve.

"I think the process, specifically talking about Larry Summers and the decision to not move forward with him as Fed chairman, is horrendous," said Highbridge Capital Management co-founder Glenn Dubin at the Bloomberg Markets 50 Summit.

Dubin, whose Highbridge firm is owned by JPMorgan Chase, also said the process around Summer's failed bid was a "fiasco" and that "he was hung out to dry." He said Summers would have made a "great" chairman.

Summers recently withdrew his name from contention when it became clear the nomination process would be difficult.

Marc Lasry also voiced support for Summers.

"Larry would have make a great fed chairman," said the Avenue Capital co-founder and prominent Democratic fundraiser. Lasry said he knew Summers, but not the likely nominee Janet Yellen.

Summers himself spent two years—from 2006 to 2008—in a part-time role at hedge fund firm D. E. Shaw & Co.

Bruce Richards, CEO of Marathon Asset Management, said he supported Yellen to run the Fed. He also offered a theory on the recent Fed decision not to curtail its quantitative easing.

Richards suggested that Ben Bernanke surprised the market by not tapering bond purchases because it was growing increasingly likely that Yellen would be the next chair. Yellen is considered a greater advocate of government stimulus than Summers.

