Risk appetite and tolerance changes dramatically once you hit many commas and zeros in your net liquid assets. Hedge funds offer to "hedge" enough risk to make

Risk appetite and tolerance changes dramatically once you hit many commas and zeros in your net liquid assets. Hedge funds offer to "hedge" enough risk to make rich people feel more comfortable about their money (making rich people feel comfy about their money is a huge business in of itself). Chasing an extra 2-3% in gains in return for exposing yourself to more draw down risk starts feeling very different when you have $200mm in liquid cash and even a modest +5% a year is $10mm. On the other hand, sometimes you want above-average returns and are willing to pay the fee to potentially nab it.