Not sure why people enjoy comparing hedge/private equity/venture capital/debt/alternative funds to equity indices like the S&P.
The majority of investors in these investments are looking for returns which are less correlated to the major equity and bond indices... since those are easy to replicate, but also bring much more risk/volatility than they would like to have.
Of course the investment managers get paid extremely well. If it were easy, then the fees would start being eroded through competition. Of course, it is a free market, so investors should be free to put their money wherever they like.