Some portfolio managers who left mutual funds in recent years to run hedge funds are returning to their roots, the Financial Times reports.

Lured by the chance to invest any way they want, not to mention hedge funds' lucrative fees and loose regulation, some skippers have become disillusioned by the instability of hedge funds. They've also found it difficult to exploit market inefficiencies to deliver stellar returns in a sector becoming increasingly crowded day by day. In fact, according to data from Hedge Fund Research, hedge funds are up about 5.7% so far this year, compared to an average 19.5% return in 2003.

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