In some sense, that's good news, and an affirmation that alpha is real and can be produced on a consistent basis by some exceptional people. The bad news is they won’t take any of your money to manage -- and if they do, there's a chance that they may not share as much of the alpha they produce as you might like.
Just by way of perspective, in light of all the news media coverage that hedge funds enjoy, they still manage a relatively small share of investable assets -- about $3 trillion. The entire industry manages less than one giant asset manager, like BlackRock or Vanguard.
Until the hedge fund community decides on a uniform -- and mandatory -- set of reporting rules for performance, it probably will remain a limited part of the asset-management industry. Given those fees and performance figures, maybe that's a good thing.
1. Note that similar complaints about high fees and poor performance are also dogging the mutual-fund industry about performance. My Bloomberg colleague Eric Balchunas used Janus as an example in a recent post.
This article was provided by Bloomberg News.