You would think decent performance would guarantee a long life in the hedge fund industry. But the dynamic has changed a bit. Does this Darwinian environment now require more than mediocrity? That's one way to frame the issue surrounding Martello Investment Management, a $1 billion fund of hedge funds, that has decided to return money to investors because it simply couldn't raise enough money to operate at the level it desired. FINalternatives notes that performance this year had been decent, with fund returns ranging from a loss of 3.2 percent to a gain of 5.6 percent. So it is tempting to call this a failure of marketing. Then again, you would think that they could come up with a business model that could work with a $1 billion hedge fund. That's $20 million in management fees alone.  

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