They use big data techniques to find weak correlation in data and invest moderate amounts of money in them. They never make a large return on any given investment, but they make very persistent returns; over the long run this adds up.

The limiting factor behind what they do is that it doesn't scale.

> How did these guys make 98.5% in 2000 and 33% in 2001 in the depths of the .com collapse of Wall Street?

The name "hedge fund" comes from the concept of a hedge; a strategy that will underperform in good times, but over perform in bad ones. 2001 is the exact time you'd expect a hedge fund to do well, especially one focused on dispassionate data analysis.