I am Trying to Figure Out Why This Would Draw Investors Back into Hedge Funds

Apparently hope springs eternal and the industry is a genius at marketing because I cant understand the following :

from the WSJ

Hedge Funds Ain’t Dead Yet

With an improved environment for stock picking, the average hedge fund is up an average 5.4% through August

Written off less than a year ago as overpriced and underperforming, hedge funds are pulling off an unexpected two-step this year: Making money and taking in new cash.
The average hedge fund is up 5.4% through the end of August, while stock-focused hedge funds have gained 8.31%, according to the researcher HFR. Over the same period, the Standard & Poor’s 500 rose 11.9% including dividends, while the traditional 60-40 split of stocks and bonds would have earned 8.9%.
That makes this year the industry’s best relative performance in a rising market since 2010. Investors, particularly in Asia and the Middle East, have begun sending new money hedge funds’ way, attracted by the better returns and a broad lowering of the industry’s famously hefty fees.

So a middling performance using what is by a riskier strategy and more expensive investment vehicle than a simple index fund attracts investors...color me confused

One example that investors in hedge funds could find themselves a part of is described in the article

One of the biggest rebounds is under way at Brahman Capital Corp., a New York hedge-fund firm that flew under the radar for more than three decades.
At its apex around two years ago, Brahman managed more than $5 billion, as principals Mitchell Kuflik and Robert Sobel bet big on hedge-fund favorite Valeant Pharmaceuticals International Inc. When Valeant’s stock plummeted from $257 to $14 a share, Brahman fell in turn, as the firm reported losses and investors pulled their money.
Brahman sold Valeant stock last year and with what is now $3.8 billion of remaining cash pivoted to new ideas like a stake in travel company Expedia , people close to the firm said. This year, Brahman’s main fund is up 17%, the people said

With the availability of so many low cost ETFs both capitalization and weighted systematically towards factors that have been found to potentially add to returns it is hard to justify the use of hedge funds even at fees reduced from the old style "2 and 20".

As for the claim of a better environment for stock picking I cant remember a time when I haven't heard that one and not seen results that justify the claim.