While hedge funds are known to outperform the markets, earlier studies have repeatedly shown they rarely do for a protracted period of time. But a new report, by the National Bureau of Economic Research, to be issued this month, shows that many of them do, in fact, beat the markets for a long period of time, The New York Times reports.

The authors of the study -- Northwestern University finance professor Ravi Jagannathan, University of Arkansas assistant finance professor Alexey Malakhov, and Goldman Sachs equity derivatives associate Dmitry Novikov--maintain that earlier reports on hedge fund performance are flawed. While it is true that the performance of hedge funds is skewed upwards many times due to poorly performing hedge funds liquidating, the same is also true of highflyers, which frequently close their doors to new investors and are thereby likewise omitted from performance databases.

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