This is ridiculous. Hedge funds have been a spectacularly bad waste of money--but now you want investors to say "thank you, sir, may I have another?"
CEM Benchmarking collected data on the actual investment returns of more than 300 large U.S. pension funds over the 14-year historical period 1998-2011, and grouped them into 12 asset classes. Hedge funds were the WORST performing asset class, with net total returns averaging just 4.77% per year: worse than all four categories of fixed income, worse than all three categories of equities, worse than all three categories of real assets. The study, sponsored by NAREIT (my employer), is available for download at https://www.reit.com/sites/default/files/media/PDFs/AssetAllocationandF….
Yet the investment costs of hedge funds averaged 125.1 basis points per year--more than for any other asset class except private equity.
That's the result of "the largest established hedge funds (which) are generally superior investments," according to this article.
So now, after institutional investors have spent 14 years paying spectacularly high costs to get spectacularly low returns, you want them to pay much HIGHER costs to get WORSE returns?
What about the option of simply learning from past mistakes and walking away from this lousy investment approach?