The performance of funds of hedge funds has apparently underperformed that of direct investments in hedge funds even after correcting for fees. Why is this?

 The performance of funds of hedge funds has apparently underperformed that of direct investments in hedge funds even after correcting for fees. Why is this?  Performance Table April 2003 to July 2010. A comparison of FOF, HF and a sample FOF *HFRXGL is an investable hedge fund index, HFRIFWI is the HFRI hedge fund index,

  At the beginning of 2010 equity markets had benefited from almost a year of positive returns. At the beginning of 2009 it was clear that it would be fairly easy to make money in the market given the degree of pessimism in the market at the end of 2008 and how much equity markets

Forget about correlations.   Since Jan 1998, over 159 months,  

Forget about correlations. Since Jan 1998, over 159 months, Hedge funds were positive when equities were positive 80 months or 50.35% of the time. Hedge funds were negative when equities were negative 47 months or 29.6% of the time. Hedge funds were positive when equities were negative 25 months or 15.7% of the time. And