Warren Buffett, the world’s second-richest person, on Thursday stepped up his criticism of hedge funds, calling their fee arrangements “grotesque” and cautioning shareholders against unrealistic return expectations.

In the legendary investor’s much-anticipated annual letter to Berkshire Hathaway shareholders, he slammed “Wall Street’s pied pipers of performance” and said it was “folly” for investors to pay ever-greater commissions and fees in an attempt to increase returns.