There is a wide set of business models in the alternative investment industry. The WEF's Alternative Investments 2020 - The Future of Alternative Investment provides a good framework for how hedge funds can be classified through their business model.
Most began as start-up, but have now moved either into global alternative firms or specialists. This is similar to the traditional asset management world where the differentiation is based on either asset gathering or skill-focsed as a core approach to business.
The fact that more firms are moving away from a skill focus suggests the direction of the alternative investment industry. Alpha may be important, but asset gathering may be the greater goal. This could be a reason for why hedge funds have not been performing as well as when they were small and solely focused on return generation.
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