Not sure of your particular situation but I suspect they are returning your capital to you and that’s why it looks like you are beating the market and having tax loses. Warren Buffet won his million dollar bet that an S&P index would beat hedge funds. Every study I’ve read shows low cost index’s beating hedge funds.

Hedge funds make hedge fund managers rich (with your money), and give investors who want to feel fancy, something to talk about at the club. They don’t beat low cost index funds. That may change in the future, but right now you are just making your hedge fund manager and whoever sold you the fund rich.

I would recommend you talk to a professional if you have the assets to purchase them. Particularly if you have a large amount of money outside of retirement accounts. You are thinking of them as a mutual fund, which they are not. They are a tax avoidance tool. They don’t have a NAV or post 1099s.

I am familiar with how they function. I completed the academic portion of the certified financial planner program (masters).

The point of my post is to point out to the average pilot that he or she is much better off using the retirement vehicles in their 401K before chasing things that claim to have “special access” to exotic investments. Your financial advisor is taking a huge cut when he sells these things to you, and the hedge fund manager is taking another huge cut by selling these things.

Not sure about the other airlines but Delta and United pilots can do back door Roth 401ks. This allows them to put almost 44K of already taxed money and 23k of pretax money in tax free (Roth) and tax deferred (traditional) accounts. Coupled with Back door Roth IRAs, they can put almost 85K of their money away. I think folks should utilize these accounts then diversify into real estate, if they still want to invest more.

AA can too. I maxed out $67k my first year via this method. I’m married, so I could also do ROTH IRA x 2 and HSA. It worked out to ~$87k tax advantaged contributions, Great deal.

Again, I’m not talking about retirement accounts. If all of your savings are limited to those, then alternative investments don’t make sense. But if you are only looking at 415C limits and IRAs, we’re not talking about assets in the same ballpark.