Or they have access to walls of insider information well before most others as well as a lot of influence. Hard not to make money when you essentially help run the show.
In general, hedge funds have bee lagging general stock indexes for the past several years. So it is puzzling that institutions still pile $$$ into hedge funds. Most of the high flier hedge funds are on leverage and on huge margins. Leverage/margin is the heat of the hedge fund industry. During that Thanksgiving black Friday, margin position exploded. It was not as bad as the Billy Hwang situation, but similar. With all the free money out there, I see the situation stays the same in the near future. The era of Warren Buffet and Peter Lynch is over. All retail and institutional investors believe they can beat the market and generate 100% or 200% returns year over year. 15% is not enough.