Venture capitalists have a longer horizon than most mutual fund managers or retail investors, and they count on making outsize returns for taking outsize risks on early-stage companies.

But investors who leverage themselves to the hilt in pursuit of quick outsize returns often find that they are rapidly burning up the capital in their accounts when a few trades go sour.

Hedge-fund managers are convincing institutional investors that they are far better served not seeking outsize returns, because those returns entail taking too much risk.

Mr. McCamant, for example, said, "This is an area where you get the same kind of outsize returns as in high tech, but where the sector is at an earlier point in the cycle."

Much of the vast sums flowing into hedge funds these days comes from pension funds and other institutions, which prize predictable performance over outsize returns.

But they could not benefit from the outsize returns of the overall endowment, with its diverse investments, because of tax consequences.

Managers of hedge funds - private pools of managed capital that have historically produced outsize returns while charging unusually high fees - can take home as much as 20 percent of the profits.

For years, Mr. Cohen's outsize returns, and his pay, have inspired awe and envy in the hedge fund industry.

Over the last 10 years, he has built a $1 million fund, Greenlight Capital, into a $4 billion behemoth, delivering outsize returns.

The book offers a rare peek inside a world that thrives on secrecy and the promise of outsize returns.