The statement has little or no meaning. The comment "absolute return" manager also has little meaning other than the manager will try not to lose money. What about risk-adjusted returns, does this have meaning? A good risk-adjusted return is where I get paid more return than the risk I may take-on. For many, producing a two to one return to risk ratio is a very high threshold. Most produce return to risk ratios that are lower than one.
Is there a good answer to these general questions? No. Returns have to be measured relative to their beta, risk-adjusted benchmarks. Simply put, can a hedge fund generate higher risk-adjusted returns relative to holding a market benchmark? Is there alpha with the hedge fund manager against an appropriate traditional investment alternative? The alternative should be better than a traditional choice after accounting for risk. Hedge fund managers should clearly address this issue for investors by being precise on what they expect to deliver to investors.