Only a highly confident investor would bet against Warren Buffett. But Ted Seides had the humility to admit that his loss of a $1 million wager is all but certain. Unlike what most believe, though, he said the high fees charged by his hedge funds were not to blame.

When Seides was introduced as the only man “brave enough” to answer Buffett’s call to place a bet against anyone where hedge funds would be pitted against low-cost passive investments, he was quick to clarify that he would be better characterized as ”stupid enough” to take on Buffett.

The bet, which was made almost 10 years ago, will be settled at the end of this year. The $1 million wager put the 10-year performance of the S&P 500 against a selection of five hedge fund-of-funds from 2008-2017. With hedge fund performance lagging throughout the last decade, Seides has conceded to losing the wager with Buffett.

The bet was prefunded 10 years ago, when Buffett and Seides’ former firm anted approximately $320,000 each. That amount has grown to nearly $2 million, which will go to the winner's charity.

Seides is the managing partner of Hidden Brook Investments, LLC, an advisory and private investment firm. He was a founder of Protégé Partners LLC, a multi-billion dollar alternative investment firm in the hedge fund space. Previously, he worked at the Yale University Investments Office.

Seides spoke at the University of Virginia Investing Conference on November 10. He talked about why he wouldn’t make the bet again, citing recent changes in the hedge fund industry as a concern.

I’ll come back to Seides’ thoughts on the decline of the hedge fund industry, but first let’s look at how he ended up on the losing side of a bet with Buffett.