Buffett gave up significant edge when he agreed to 5 hedge funds.

Here's the logic, statistical fluctations accumulate, they do not average out or cancel out as commonly assumed. Therefore, when you have 10 companies facing enormous drag due to fees, that creates a lot of statistical fluctuations. 10 funds times 10 years gives Buffett 100 fund-years of results where the drag from investment fees would work against them. The other party to the trade was smart to get 5 funds meaning it now faces 50 fund years (of performance drag), which is a smaller sample size.