Managing Harvard University’s money apparently doesn’t necessarily make you smart enough to dodge the sub-prime shrapnel.

Sowood Capital Management—founded by former Harvard Management Co. money manager Jeffrey Larson—is down 10% year-to-date due to big bond losses over the last two months, the Wall Street Journal reports.

Unlike other hedge funds burned by the credit crisis, Boston-based Sowood seems to be in good shape. The firm, which Larson set up after the end of his extremely successful stint at Harvard in 2004, has been able to meet its margin calls and does not face any redemptions until the end of 2008. It is in no danger of shutting down, the Journal reports.

Still, the fund, which trades both stocks and bonds, has sold some positions to raise cash for margin calls, including positions in merger-related shares.