> Funds frequently return capital or close to new money in order to stay below their investment capacity.
The point is they are not open to investment once you have historical evidence that they are "good".
> Funds also sometimes charge less than the maximum they can get away with for various reasons.
The only reason I can think of is to increase investment. But that will happen even for minimal excess return.
> Moreover, you are ignoring the very real excess profits that are made on the way to this hypothetical equilibrium. Berkshire Hathaway shares aren't going to make you rich if you buy them today, but I'm guessing the people who bought them in 1970 don't care.
Obviously there are excess returns the question is if they can be reliably identified before hand and are accessible.
Are you invested in hedge funds? Which ones do you think are good now?
