Game, set and match to Robert Jones.

It is almost uncomfortable to read the feeble defense the hedge fund apologists are pawning in public forums these days. The investment consulting industry bought into the hedge fund/alt investing theme hook, line and sinker about a decade ago and in return have done more damage to pension funds and high net worth portfolios than can be imagined.

To the contrary, it can easily be argued that "under the microscope," hedge funds are worse than they appear. The yawning gap between market returns and hedge fund returns represents a lost opportunity cost to their investors. Pension funds across the country are struggling to meet their liabilities while paying exorbitant fees for underperformance. This model is unsustainable.

Why there is still significant money in these vehicles is beyond comprehension - perhaps other than with a handful of outperforming managers that deserve it. Calpers finally "got it" and you would think many more will see that the "emperor has no clothes" despite the attempts by their consultants and alt managers to obscure the view.

It did not take a genius to discern that U.S. stocks were bargains in 2010 at 10 PEs and low valuations. Yet inexplicably, most hedge funds and consultants were counseling their institutional clients to seek investments that were "non-correlated" with the U.S. stock market. What a colossal mistake! The hedgies got stuck looking in their rear view mirrors (2008) and were so caught up trying to smooth volatility and protect for the tail risks that had already occurred, that they somehow didn't notice that stocks were a screaming buy.

It seems to me that if investors are willing to pay a king's ransom in fees to a money manager, they should expect the manager to be intelligent enough to identify undervalued assets that offer above average appreciation over the long term. The vast majority of hedge fund managers have failed in that regard and not only have they terribly underperformed, they have effectively pickpocketed their investors.

With apologies to Winston Churchill..........Never before in the field of money management has so much been confiscated from so many to benefit so few.