Evaluating hedge funds takes a little perspective: On one hand, the industry is likely to double its returns this year. On the other, that amounts to only one-third the stock market's performance.
The most popular hedging strategy—long-short equity— is on pace for its best year in more than a decade.
But the industry remains a laggard against much simpler strategies, including simply buying the Standard & Poor's 500 stock market index, and has been unable to shed its negative image.
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Such is life in the business, where defeating that negative perception has become job one.
"People want to focus on what's gone wrong in the industry," said Anthony Scaramucci, managing partner at SkyBridge Capital and one of the industry's most vocal supporters. He said Skybridge was up 21.9 percent in 2012, "we're up this year, and we're doing this with a third of the volatility of the S&P."