Some investors are in fact wising up and moving away from hedge funds: http://www.cnbc.com/2016/07/26/hedge-funds-suffer-207-billion-net-outflows-in-june.html

Some investors are in fact wising up and moving away from hedge funds: http://www.cnbc.com/2016/07/26/hedge-funds-suffer-207-billion-net-outflows-in-june.html http://www.cnbc.com/2016/07/26/hedge-funds-suffer-207-billio... http://thebamalliance.com/blog/hedge-funds-miss-the-mark/ http://thebamalliance.com/blog/hedge-funds-miss-the-mark/ The trick is that some hedge funds do produce outsize returns, and every rich customer wants to think he's going to pick the winner. All in all, charging a percentage of AUM is a pretty neat scam they've got going for themselves.