Performance attribution is a very major field of ongoing research. The most simple method of skill gauging is to look at a linear model between the fund's periodic returns and a number of risk factors which are already known to be relevant to the cross-section of asset returns. If there is a statistically significant intercept estimate, then this is attributable to the skill of the manager. The reason for this is that the manager is seen as generating returns that are gained beyond how much they're exposed to the specified risk factors.
A typical specification for an equity fund would be:
Here's some evidence from a model similar to this one:
So if we accept the alpha generating model used in the table to be the equilibrium model, our answer is YES. However, the question always remains as to whether we've included all the relevant risk pricing factors into our model. If the manager was to concentrate on very high leverage and very illiquid firms then we might get a very large, positive and statistically significant alpha, even if this manager wasn't actually being skillful.
The problem with performance attribution to a single fund is that asset prices are very random. For example, if we think of stock prices as evolving according to some stochastic process (such as Geometric Brownian motion):
and we tell 1000 funds to invest randomly in a number of these processes ... Well, there will be a large proper subset of these that look "skillful" from the outside. Yet they just got lucky.
Future questions of this sort are better suited on
Here's some reading material:
However I think it'd be more beneficial for you to simply google "performance attribution" (or an analogous string).
Also, hedge funds lack transparency, are very difficult to monitor, are very hard for retail clients to invest in (they cap the number of investors so that they can avoid SEC regulations), and so are not recommended for clients that aren't very sophisticated. They also attempt to gain large exposure to very specific risks so are not suitable for retail clients.
Other important points:
A single fund with a high alpha doesn't mean much. You have to make sure that the equilibrium model is correctly specified. Also you will have 5% type-1 errors due to the definition of p-values.
You have to take into account transaction costs.
There are many many other ways to measure performance. I've described only one way to measure performance from an external stand-point.