There's not much that needs to be elaborated. Hedge funds don't make any money if they're not generating alpha. the 2 and 20 structure is powerful motivator to search for outsized returns. Hedge funds are in a hard place right now, with a lot of capital being moved out of the industry due to poor performance.
Every hedge fund guy I know constantly stresses about the overall lack of alpha generation in the industry right now. To say thet the point of hedge funds is to avoid taxes is just ridiculous. A company doesn't need to invest in a hedge fund to engineer the type short-term losses and long-term gains. And there's no reason they would, the fees are simply too high for anyone to ever do that.
Every hedge fund guy I know constantly stresses about the overall lack of alpha generation in the industry right now. To say thet the point of hedge funds is to avoid taxes is just ridiculous. A company doesn't need to invest in a hedge fund to engineer the type short-term losses and long-term gains. And there's no reason they would, the fees are simply too high for anyone to ever do that.