There are only 2 ways to survive the hedge fund reckoning

If your hedge fund is going to survive this brutal period for the industry, it's going to take either legendary talent, or an out of this world investment idea with no correlation to the market.

So either your ability or your idea have to be freakish in nature.

Otherwise - as Business Insider's Josh Barro and Linette Lopez discussed with SkyBridge Capital CEO, Anthony Scaramucci, on their podcast, Hard Pass - you're likely going to get swept away in the wash out everyone says is here.

"What I think that'll end up happening is that there will be a consolidation in the number of hedge fund managers but I actually think the asset totals will go up," Scaramucci said.

SkyBridge is an investment firm with about $13 billion assets under management. It specializes in helping institutional investors create a mix of hedge fund strategies that will generate alpha - outsized returns uncorrelated to the market - for them. Alpha, however, is harder and harder to find these days.

That doesn't mean hedge funds are dead, though, it just means that weaker managers are about to be winnowed out. Scaramucci believes that because over a market cycle of 6-7 years, really talented hedge fund managers out there can still generate solid returns without the volatility of the stock market. But again, during this difficult period especially, you're going to have to be really uncorrelated from the market and that means thinking really outside the box.

That means a plain vanilla long-short equity strategy is not going to impress investors unless you have freakish talent. Hedge funds have to offer something more exotic with their strategies. These days, even the veterans in the game (like Paul Tudor Jones of Tudor Investment Corp) are lowering their fees to make up for their lack of returns.

"Listen SkyBridge is out there negotiating fee discounts for our clients. And there is pressure on fees and fees have to come down," Scaramucci said on Hard Pass. "You can't justify in a low return environment mediocre performance and super high fees."

So start thinking weird. 

For more on how out of the ordinary your thinking is going to have to be to win in this market, listen to Scaramucci, Linette Lopez and Josh Barro on this week's Hard Pass: