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Many hedge fund managers have become billionaires; perhaps this - plus their reputations as the smartest guys in the room - is why they have captured the investing public's imagination.

Hedge fund managers charge so much more than mutual fund managers; alpha is even harder to come by. They end up selling a variety of things beyond mere outperformance.

You can't have bank holding companies acting as hedge funds. You can't have them taking a million-dollar pension plan for Joe Schmo the bus driver and treat it with the same risk appetite that you treat George Soros' pocket money. It's fundamentally ridiculous.

A hedge fund manager whose clients demand monthly performance reports has different needs than any individual investors with a 20-year time horizon. The needs of that long-term investor differ markedly from someone who is retiring in three years.

Despite all the media coverage, glitz and glam of hedge funds, they have not done well for their investors. They have high - some say excessively high - fees; their short- and long-term performance has been poor.

In 2008, people who invested in hedge funds needed capital badly, but many of the funds would not return their money. However, I gave money back to any investor who requested it. It was the bottom of the market and a pretty tough time.

Given the typical fee structures of hedge funds, they need to do something different to make money in a consistent way.

I think the hedge-fund industry has taken a reputational turn for the worse, this dog-eat-dog stuff. I'm not just talking about Herbalife or J. C. Penney, but in other situations where the media really focuses on who's long and who's short. I don't think it's a good thing for the industry.

There's accountability in the mutual fund industry. And they've been tremendous engines of wealth for people and they're going to continue to be so.