The answer can be found in relatively simple math. As a simple example, consider an investment of $1 million in a fund that generates a 10 percent return in years one and two and then loses 5 percent in years three and four. The investor would end up with about $1.09 million, a total gain of $90,000, or 9 percent, over the four years before fees.

But now consider the return after deducting a 20 percent performance fee. In years one and two, the fund manager earns $20,000 and $20,400 for a total of $40,400. The fund’s manager earns nothing in years three and four. After deducting the fees, the investor would end up after the four years with just $1.05 million, a total return of 5 percent. But the $40,400 earned by the fund is nearly 45 percent of the investor’s total gains before fees — not 20 percent. (And that’s not even figuring in a 1.5 or 2 percent management fee.)

If the losses are big enough, the hedge fund manager can capture 100 percent of the gross return, or investors can lose money even as fund managers line their pockets.

Investors seem to be finally catching on to the fact that most hedge fund managers share generously in the good times, but are exposed to none of the losses in bad.

Because of concerns over high fees and disappointing results, some endowments and pension funds, including those in Illinois, New Jersey and Rhode Island, have cut back substantially on their hedge fund allocations this year, following the lead of Calpers, the largest pension fund in the United States, which said in 2014 that it would exit hedge funds entirely.

Through the third quarter of this year, investors had withdrawn about $51.5 billion from hedge funds, according to Hedge Fund Research.

“I’ve been saying for some time that the two-and-20 model is dead,” said Christopher J. Ailman, chief investment officer for the California State Teachers Retirement System, which manages assets of close to $200 billion.