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The article describes the structure and operation of the hedge fund industry, the various investment strategies pursued by hedge funds, (and) what we know about the returns and overall performance of hedge funds.
The authors conclude that while there is some evidence that hedge funds may be able to generate excess returns, this conclusion needs to be confirmed with more refined techniques for evaluating hedge fund performance and with better data.
It would appear then that any conclusions on hedge funds are still uncomfortably tentative. With that caveat in mind, we will review both academic and practitioner research from the standpoint of a hypothetical institutional investor who is looking into whether hedge funds make sense for their portfolio.
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