Andrew Beer, Chief Executive Officer of Beachhead Capital, wrote an excellent research note recently affirming that the widely known conception that emerging hedge fund managers outperform their more seasoned and larger peers was supported by the available data.
This graphic is the nub of the explanation of why this can happen in the case of equity long/short managers.
source: Beachhead Capital
The whole research paper is available at http://www.beachheadcapital.com/index.php/articles
Reproduced with the kind permission of the author.