Hedge Funds are private investment vehicles that are structured to provide the investment manager flexibility.
Incentive compensation has lead the most talented managers in the investment profession to the hedge fund industry. The hedge fund manager is measured and paid on his ability to generate returns regardless of market conditions or a benchmark.
Hedge funds provide an attractive addition to a traditional portfolio: if they provide positive expected returns and are uncorrelated to your portfolio.
Recent performance of traditional equity markets supports the value of diversification and the use of alternative managers.
Hedge funds indices have significantly outperformed traditional investment indices on a risk-adjusted basis and have low correlation with the broader markets.