Not surprising if the absolute returns are from finding inefficiencies. Given an absolute amount of inefficiencies, these are shared over more funds.
Do hedge funds offer value for their fees? No - FT.com:
"Just as individual hedge funds tend to do better when they are small, so too, his analysis shows, the industry as a whole performed better when it was a largely unknown $200bn business, rather than the high profile $1.9tn industry it had grown to become, before the financial crisis in 2008 so dramatically exposed some of its shortcomings. The comforting compounded rates of return reported in hedge fund indices give a misleading impression of the actual cash returns achieved by hedge fund investors. Most of the client money that has flowed in since the industry began to be institutionalised has not achieved anything like the returns the long-term headline index figures suggest.
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