John McCormick has been on a mission for the past five years: to bring hedge funds to the masses.

That may seem like a tough sell. Traditional hedge funds, those lightly regulated investment pools open exclusively to large institutions and rich individuals, have been duds lately, trailing the U.S. stock market’s performance every year since 2009 by an average of 10 percentage points, according to Hedge Fund Research Inc data.

But already, McCormick, a senior managing director at Blackstone Group LP, has been wildly successful. He has done so as a tireless evangelist for what are called liquid alternative investments, or “liquid alts.” Like hedge funds, they invest in everything from simple stocks and bonds to all sorts of complex derivatives and other “alternative” assets. The main difference is that liquid alts are packaged as mutual funds and marketed to retail investors who can’t invest in traditional hedge funds.

“Any investor who wants access to alternative strategies should have access to them,” as long as they are suitable for the investor and properly explained, McCormick said in an interview.

Apparently investors agree. Though critics complain about high fees, opaque strategies and other factors that they say make liquid alts inappropriate for small investors, these products have become one of the fastest-growing types of mutual fund.

Liquid alt assets under management in the U.S. and Europe have surged to about $440 billion, according to Preqin, a research firm specializing in alternative investments. In 2008, analysts estimate, the figure was less than $100 billion. Blackstone and its chief rival in this market, Goldman Sachs Group Inc, manage half of all liquid alternative assets sold by big brokerage firms, according to Dover Financial Research.

The appeal is not outsize returns: Liquid alts have delivered even less than hedge funds in recent years.

The reason for their popularity, McCormick said, lies in the 2008 financial crisis and the damage it inflicted on many small investors’ portfolios. “You have baby boomers nearing retirement who experienced a scary event in 2008,” he said. “People who thought they had diversification and didn’t really have it.” The long lists of assets liquid alt funds hold are designed to provide that diversification, he said.

Now, McCormick is among the scores of fund marketers pushing to get liquid alts on the menu of options for U.S. workers’ employer-sponsored, tax-deferred 401(k) retirement savings plans - a pool of money that totals $4.4 trillion. To date, these accounts have offered little-to-no exposure to alternative assets like hedge funds, private equity and real estate.