I beg to differ. As far as recent financial reporting goes, this is a pretty fair account. Although the financial system in general is regulated, hedge funds a

I beg to differ. As far as recent financial reporting goes, this is a pretty fair account. Although the financial system in general is regulated, hedge funds are unregulated as compared to mutual funds. If you want to know more about a given mutual funds, you can login to your online broker and see the prospects, asset allocation, turnover, financial statements, etc. Not so for a hedge fund. This is not to say that they're unsufficiently unregulated, it's just a statement of a fact (if hedge funds were more regulated, they'd probably cease to exist!). Another important point is that many hedge funds are, or at least claim to be, equity-market neutral. They do it by short selling and by investing in other asset classes. So the fact that S&P is down 40% is a perfectly good excuse for a index fund manager, and a fairly good excuse for an active mutual fund manager, but not a very good excuse for a hedge fund. In fact you can see some hedge funds apologizing for the bad performance: http://dealbreaker.com/images/thumbs/TPG%20Axon%20Investor%20Letter%20%281-Oct-08%29.pdf http://dealbreaker.com/images/thumbs/TPG%20Axon%20Investor%2...