I have the ability to become an accredited investor which would give me access to investing in hedge funds. I feel like I have a good grasp on the risks inherent to investing in standard index funds in a standard brokerage account but I am much less clear on the risk/reward for hedge funds and how to assess that. I am not completely risk adverse, my portfolio is about 85% equity at the age of 47, but I also want to know what I am getting into and recognize with higher potential return likely comes higher risk. The way they advertise of course suggests the opposite that downturns are less than even standard index funds due to "active risk management" while returns are generally higher. I am of course skeptical and feel like there has to be an asterix there somewhere. If the only caveats are needing to be accredited, needing a large initial investment or there being some lockdown period from initial investment to when you can sell and there actually isn't higher risk..then I would consider it.
Anyone have any experience here or know how to better evaluate the value in trying to invest at a hedge fund?