This is why hedge funds underperform indexes in bull markets but beat them in turbulent times.
Agreed on the first part; I’d want to see hard statistics (after fees) on the second part (and, no, citing the 3 or so famous exceptions that are closed to outside investors and might have used illegally obtained insider information doesn’t invalidate the larger point).
Hedge funds have only outperformed the market twice since 2008.
Once was during the financial crisis of 2008 (-19% vs -37%) and once was 2018 (-4.07 vs -4.38).
It's unclear what benefits you are getting here.
An example would be a real-estate company that has holdings in a fund. Preservation and low volatility is far more important than raw gains and can be used as collateral to offset losses in physical property valuations.