Rise of hedge funds

I thought that big company CEOs were overpaid, but read this:

A study by Steven N. Kaplan and Joshua Rauh finds that it's not corporate honchos who are filling up the ranks of the filthy rich. It's hedge fund managers. Or, as Kaplan and Rauh put it, "the top 25 hedge fund managers combined appear to have earned more than all 500 S&P 500 CEOs combined." The hedge fund guys are profiting not because there's been a shift in social norms favoring the mega-rich. It's just that a few superstars are now handling so much capital.

This New Yorker article says that the hedge funds are making their managers rich, but the funds aren't necessarily doing that well for investors.

Update: Here is an example of a hedge fund doing badly. The Harvard endowment invested $500 million in Sowood's Alpha hedge fund, and the fund lost most of its value just in the last month.