I think he is pointing out that if you look at the 2008-2009 timeframe, the hedge funds had a loss of roughly 5-15%, while the S&P500 had a loss of roughly 20%.

I think he is pointing out that if you look at the 2008-2009 timeframe, the hedge funds had a loss of roughly 5-15%, while the S&P500 had a loss of roughly 20%. The hedge funds did better in bear markets... they just don't do well enough in bull markets to make up the difference over a 10 year period with only a single crash. In a theoretical world where modern hedge funds were in business between 2000 and 2009, we might have come to a different conclusion: there were a number of down markets during that time and hedge funds might have been able to do much better.