Jim Stewart in the New York Times has noted the poor performance of many large university endowments, and in the process questions their large allocations to alternatives. Hedge funds figure prominently for many of them, and their investment committees are learning the hard way that uncorrelated returns are not unlimited, and that the hedge fund industry is overcapitalized. Jim is pursuing an important story and one that ought to make all institutional investors stop and reconsider what passes for conventional wisdom – a sizeable allocation to hedge funds.