Hedge Fund Returns

Hedge funds didn't have a great go at the markets in 2014.  Business Insider citing outside sources says hedge fund returns were up around 3%.  That's compared to the S&P 500's 13.7% return and a few better publicized composites showing that diversified portfolios returned between 5-6% last year.

I'm not sure what there is to say about this other than note the continued poor performance by the crowd that charges 2% management fees and then takes 20% of the profits.  I know that some funds shot the lights out and that there are good firms that consistently do much better than this.  But the aggregate performance of the industry should be something that all investors consider when getting ready to lock down money in private funds.  I'm not sure how probably 80% of these investors justify getting paid anymore.  I think there's gong to be a real shake out in this industry in the next 2-3 years if things don't change.

Link:  Business Insider.com:  "This is What the Hedge Funds that Won in 2014 Looked Like."