> They raise millions, and for a set period of time the people who gave them the millions cannot pull it out, allowing them to execute strategies that may not make any money for several years, which is different from a traditional investment organization

That's not the most accurate. Many (most?) hedge funds don't lock funds for any significant amount of time; the most would be a few months, and even that not because they hold illiquid investments, but because they want to discourage investors that react too emotionally on market moves. I'm guessing your description is more appropriate for VCs and Private Equity.

Hedge Funds do, however, execute strategies not available to "traditional" instituational investors, but that is mostly because of regulatory constraints - e.g. index tracking funds can advertise to the public, hold pension investments etc., whereas hedge funds can't. Another difference is that hedge funds usually have a much broader investment mandate - e.g. a bond mutual fund has to invest the majority of its AUM into bonds, even if everyone believes bond prices will drop, whereas a hedge fund could simply sell everything and keep cash or buy stock or whatever its managers believe will make money. The flip side of this is that "traditional" investment institutions are measured against benchmarks (e.g. if a bond fund makes -20% in a year when a bond index made -21%, the bond fund "outperformed"), but hedge funds are measured absolutely (profit is good, loss is bad) and get paid peanuts if they don't make a profit.