Hedge funds are beating the market for the first time in 10 years and investor Ted Seides told CNBC it is possible they can do so over the next decade because "anything can happen in markets."
Last year, Seides lost a 10-year bet he made with billionaire Warren Buffett that hedge fund performance would top that of the .
He took the bait from Buffett when he was founder and president of Protege Partners, an alternative investment firm that invested in established small and select emerging hedge funds.
However, Seides, now managing partner and advisor at Hidden Brook Investments, told CNBC's Leslie Picker on "Power Lunch" Wednesday that hedge funds are really more focused on delivering an equity-like return stream that has a low correlation to the market.
"Hedge funds really don't try to beat the market," he said. "Could it happen? Sure. How might it happen? These types of market conditions – higher interest rates, more volatility are certainly more conductive for differential returns in security selection."
In fact, those conditions are what helped managers in the $3.2 trillion hedge fund industry post a 0.38 percent gain in April. That brings the total return for the year to 0.39 percent, according to industry tracker HFR.
The HFRI Fund Weighted Composite Index finished April narrowly ahead of the S&P 500, which posted a loss, including dividends, of 0.38 percent through the first four months.
It is the first time the hedge fund industry has outperformed the stock market index since 2008.
— CNBC's Jeff Cox contributed to this report.