Warren Buffett was referring to traditional (long-only) investment funds... He himself was for many years running a hedge fund (and had learned from the pioneers of hedge fund investing.)

https://www.bloomberg.com/view/articles/2012-04-24/what-was-...

http://www.forbes.com/sites/randalllane/2012/03/26/warren-bu...

https://www.quora.com/What-was-the-fee-structure-of-Warren-B...