The short answer is that index investing is a different asset class to hedge funds and private equity, with a very different risk profile. And remember, there a

The short answer is that index investing is a different asset class to hedge funds and private equity, with a very different risk profile. And remember, there are plenty of different hedge funds with different strategies, industry focus, capital structure, etc. and the same goes for private equity. For example, private equity is very similar to a VC, they give LPs access to a type of company which is not public... and we all know how varied the VC industry is. Investors need to build a portfolio, and this requires a wide range of asset clases.