> If you want to outperform the market, however, you need to find a GREAT hedge fund that charges 1% management fee (at most) and an incentive fee...otherwise it doesn't make sense to pay a flat fee to a MF and get just average performance. (There are exceptions as some MFs do consistently outperform the market but these are few and FAR between).

You'll have difficulty finding even a good hedge fund at 1% management fee. Most charge what's known as Two and Twenty -- 2% of assets under management and 20% of profits. Point72 charges as high as 3% and 50%.