The trade that was supposed to carry the year is ruining it instead.

Hedge fund and private equity managers over the past year began piling into debt issued by troubled energy companies, hoping to profit off a reversal of oil's slide. They raised billions of dollars for the effort, in many cases telling backers it was a once-in-a-generation chance to pounce. But crude has continued to fall, slamming the companies and many large investors who thought they had bought in near the bottom.