Hedge funds and private equity are slightly different. Private equity is the leveraged buyout business that got rebranded after its callous performance in the 8

Hedge funds and private equity are slightly different. Private equity is the leveraged buyout business that got rebranded after its callous performance in the 80s. Hedge funds are usually long/short in public equities (stocks, bonds, etc). Those guys haven't been performing well, and they have had a secular decline in their ability to charge high fees to clients. 2/20 doesn't exist for the vast majority of HFs anymore, more like 1/15, etc. There are a small number of funds that do growth equity (where they buy a small business and grow it), but so much of it just depends on financial engineering in the way you mentioned in your comment.