Dallas-based Carlson Capital's Black Diamond Thematic fund has lost 14.2% net this year through July 31, according to a client update reviewed by Business Insider, and bitcoin mania is partly to blame.
The $1 billion equity long-short fund had been up about 10% after fees around this time last year, Business Insider previously reported.
Carlson Capital manages about $9 billion firmwide.
"We are naturally disappointed by the performance of the first half of 2017," the portfolio managers, Richard Maraviglia and Matthew Barkoff, wrote in the fund's second-quarter letter, which was also reviewed by Business Insider.
In the letter, dated June, Maraviglia and Barkoff said their fund remained short the stock market, notably in the semiconductor space.
But the surge in interest in bitcoin and ethereum has pushed shares of semiconductor makers higher.