The promise of hedge funds (the original one at least) is that they provide bond-like volatility with equity-like returns. Of course, hedge funds nowadays are

The promise of hedge funds (the original one at least) is that they provide bond-like volatility with equity-like returns. Of course, hedge funds nowadays are just defined by a compensation scheme (2 and 20, though today more like 1.5 and 15). Hedge funds are exactly the kind of investments that pension funds should have.