“We were better when we were smaller”, says Lack in a video interview on Opalesque.tv (http://www.opalesque.tv/hedge-fund-videos/simon-lack/1). He agrees that there are “great hedge funds out there”, that some of the most talented investors in history run hedge funds, and that plenty of investors are happy with their hedge fund investments.

However, in his analysis, Lack is not looking at individual funds, but at the total dollar amount put into hedge funds by investors. The profitable years of the late 90s involved far fewer investors than today, and after hedge fund assets started to balloon from 2000 onwards, investors would be missing out: Looking at the aggregate investor profits and fees from 1998 to 2011, Lack estimates that 84% of the total went as fees to the hedge fund managers, 14% to fund of funds and just 2% went to investors as investment returns.

You can view the video here: http://www.opalesque.tv/hedge-fund-videos/simon-lack/1