"Presumably the people who invest in hedge funds are intelligent, knowledgeable people who can understand these fees." You would be surprised. Many of these inv

"Presumably the people who invest in hedge funds are intelligent, knowledgeable people who can understand these fees." You would be surprised. Many of these investors are large institutional funds like state pensions funds. They have a large sum of money that needs to be put somewhere, preferably with minimum due diligence, and 100s of mediocre indistinguishable funds to chose from. People are more apt to pay attention when they are managing their own money