The Crimson article goes into some claims about why the fund underperformed compared to other university endowment funds: complacent and hidebound managers, dependence on siloed approach that focused too much on asset class and not enough on the overall fund as a whole. I also suspect that pressure from the current late-stage capitalist economic culture (defined in large part by HBS grads) played a part in the decision to give it all to outside hedge funds.
The way I look at it is that if you have more money to invest than you as a layman know what to do with then it makes some sense to find a trustworthy money manager (really a bookie) who spends his whole day paying attention to the markets. Most people, though, can just bung their market investment money into a portfolio of low- or no-fee index funds and leave it at that.
