Long-short funds, sometimes known as market-neutral funds, eked out gains of just 0.25 percent this year, well behind the S. & P. 500, suggesting that these fund managers were worse stock pickers than most people, even in a market with many declining stocks.

Sebastian Mallaby, author of “More Money Than God: Hedge Funds and the Making of a New Elite,” told me this week that he now questions one of the basic premises of his book, which was published in 2010. Then, he felt that hedge fund managers’ compensation — typically 2 percent of their assets under management and 20 percent of any gains — provided a strong financial incentive to “hustle more and work harder,” which should have led hedge fund managers to do better than traditional mutual fund managers. “It hasn’t,” Mr. Mallaby said.

One reason, he suggested, is that the 20 percent incentive fee has declined in importance as assets have grown so large. “Once you have so much money under management, that 2 percent fee alone makes you rich. You can make so much money just sitting on the assets that the incentive to find great returns is weakened. I know many people in hedge funds, and that’s their attitude.”

He pointed out that in the early days of hedge funds, there were no management fees — just a percentage of whatever money their funds earned. He said institutional investors should now insist that hedge funds reduce their management fees.

Despite what now amounts to nearly a decade of underperformance, money keeps pouring into hedge funds. Hedge fund assets stood at $3.2 trillion at the end of 2017 and hit a record at the end of March, according to Mr. Heinz of HFR.

That seems a paradox, but the longer the bull market continues — it’s the second-longest ever, and is closing in on the record — the more institutional investors worry that another bear market is imminent and that hedge funds might provide protection.

“No one is forecasting a bear market,” Mr. Heinz said, “but things can change quickly. Given all the trade and tariff issues, we’re in uncharted territory.”