Who are the investors in hedge funds and why do they do it?
I'll prob get downvoted to death but I'm actually curious. I'm currently an incoming IB analyst at an EB and want todown the line. However, I've always wondered why exactly investors are interested in putting their money into hedge funds? I remember Warren did a bet that the S&P500 would out perform hedge fund managers and Wall Street and ultimately won that bet. Moreover, hedge funds also seem risky with blowups such as that of LTCM or more recently with Archegos.
I get that maybe you want diversification and exposure to a short only fund or maybe a niche market focused fund as a hedge of sorts, but otherwise just don't understand the logic behind it. How consistently can hedge funds actually generate? Also given the rise of WSB and the retail trader market wave, do you think the HF scene is set up to be disrupted soon? Would love some input. Thanks