The CFA unfortunately doesn't have much helpful to say about evaluating hedge fund performance. You'd like to see if there's any alpha there, but the best they can offer is a series of variations on the CAPM theme, where alpha's what's left over after you've subtracted out the Betas for whatever you want to qualify as a risk factor.
If I believed in CAPM this would be alarming for its arbitrariness.
If I believed in CAPM this would be alarming for its arbitrariness.