The lack of transparency explains most of this. Investors expect the Hedge Funds to have some inside info. For example, I've heard some hedge funds have "frie

The lack of transparency explains most of this. Investors expect the Hedge Funds to have some inside info. For example, I've heard some hedge funds have "friends" who are staffers for congressmen. It's quite profitable to know what laws will change before everyone else does. The investors may be recognizing that hedge funds are profiting from political corruption, & choose to look away from the ugliness & pay the fees in order to get in on the deals.