Professor Philip Lane:

The reason that billionaires would now be investing in the hedge funds, would be that perhaps these smart guys could find returns that are not available from putting money in a regular deposit fund or regular investment vehicles. That is very much part of the same general dynamic when interest rates are so low that if one wants to make a bit extra what can one do? One can take on more risk explicitly and I think those hedge funds and private equity funds would say that they are good at working in risky environment. Even more damaging was where the risk was hidden, where mortgages got chopped up into safe and less safe components. When what looked safe was not safe, there was mispricing of risk.