Hedge Fund Jobs

Updated on April 11, 2024
Article byWallstreetmojo Team
Edited byWallstreetmojo Team
Reviewed byDheeraj Vaidya, CFA, FRM

What Are Hedge Fund Jobs?

Hedge funds jobs are very common among people in the finance domain as they can get a lucrative salary by getting into it where the various jobs in hedge funds include the role of the fund manager, role of analysts or a Sales Manager, Marketing Manager, or the role of accountant, etc.

Hedge Fund Jobs

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Want to land up with a hedge fund job? Well, it is not something uncommon today. What makes it the highly looked-for path in the finance domain is that it provides excellent prospects to have a thrilling work life and make piles of money. I am sure you are tempted to know how and why? Let’s get started.

Hedge Fund Jobs Explained

Hedge fund jobs are those kinds of career opportunity that allow companies to work with financial institutions who come up with investment strategies by using various research models and trading procedures. They also perform the task of portfolio management.

Professional in this field with hedge fund analyst jobs have to be very thorough about various risk management strategies because the the funds are highly leveraged. It is a very interesting and lucrative career option for aspiring students and candidates who possess a lot of interest in the field of investment.

There are different segments in this type of job, which includes trading, accounting, investment and advisory services. Even the entry level jobs offer good salaries. However, they need to remain updated about the different changes in rules and regulatory requirements. These professionals are very thorough with model building, research techniques, and number crunching. They begin their journey by exploring the methods of data mining and data analysis and aims at making profits by using opportunities in financial markets where there are short term fluctuations and arbitrage.

Candidates with hedge fund analyst jobs need to be ambitious and smart enough to keep track of any changes in the global and local market conditions. There are also rooms for creativity and independence in exercising strategies. However, they need to put up with long and extra working hours, which often become stressful, with low job security.

The candidates need to have good technical skills in the field of accounting, finance, management, valuation and investment banking. They need to have the passion to explore the stock market with critical thinking. But the opportunity to exit is quite less in this field.

The various types of career opportunities in the field of hedge fund are explained elaborately in the articles below. But overall, their task includes keeping track of company and industry trends, communicating with clients, management and other stakeholders, handling queries and questions of managers and analysts, creating, models and valuations to support their ideas. Along with following a very hectic schedule, they get very good compensation levels, with an expectation of high performance from their employers.

Types

Working in this kind of senior or entry level hedge fund jobs opportunity is both lucrative and complex, requiring high level of commitment, skill, work ethics, and eagerness to learn. There are also a lot of perquisites offered to the right candidate. But in order to secure a place in it, professional may have to face tough competition which bring about the importance to good knowledge levels, experience and also temperament.

Possessing updated knowledge regarding the financial world and continuously improving is of utmost necessity. Vey often it leads to people changing jobs, resulting in very high attrition rate, because they are not able to keep up with the work pressure that the job demands. However, let us study the different types of jobs available in the financial market related to hedge fund, as  given below:

You could be hired for as senior or entry level hedge fund jobs any of these hedge fund jobs:

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#1 – Analysts

  • The analyst is often the typical entry-level position in hedge fund careers. The hedge fund analyst job is also referred to as the investment analyst or research analyst.
  • Role: In this role, you would be evaluating- company financials, economic and market conditions, investments such as bonds, commodities to invest for the hedge fund. Also, you are required to analyze financial statements, prepare financial models in excel, evaluate the risk of an investment, and find assets that comprehend the hedge fund strategy to bring in maximum returns.
  • Prerequisite: Working as an analyst in a small hedge fund would require a broad knowledge base, whereas, in the case of a larger one, it could be more extensive with specific know-how of the industry, region, or investment.
  • You could spend a lot of time attending meetings, traveling, and making phone calls, which is why making contacts is vital for their success.

#2 – Accountants

  • A hedge fund Career as an accountant requires you to manage the finances of the hedge fund and maintain the books of financial records accurately for the fund.
  • Role: The role includes recording the financial transactions, preparing and filing the financial statements, examining and reporting the profitability of the fund, and reviewing the same. The work is essential for the fund as it allows them to go back and analyze the funds’ profit and losses.
  • Pre-requisite: These accountants are usually Certified Public Accountants (CPA’s).

#3 – Sales and Marketing Manager

  • This hedge fund job is for you to maintain client relations, particularly when the fund manager does not desire to take up this responsibility.
  • Role: Your job would involve bringing in the capital for the fund. This is done by marketing the strategy and returns of the fund to prospective investors. The work would be more target-based; for example, you would be expected to bring in at least 10 million for the first year at the fund.
  • Prerequisite: As a marketing and sales manager, you will have to manage and maintain client relations and continuously bring capital into the fund. Therefore, someone in this role must be confident, persuasive, and have good people skills.

#4 – Fund Managers

  • Maximizing the return on investment funds is the most crucial goal of the hedge fund manager.
  • It depends on the size and type of strategy employed in the hedge, more than a kind of hedge fund manager specific to the kind of investment such as bonds, commodities, or sectors such as telecommunication or pharmaceutical.
  • Role: Hedge fund career as a manager for quantitative hedge fund jobs is responsible for selecting the investments of the hedge fund in certain specific proportions to make up a portfolio. For choosing the investments, you would be required to research a wide range of assets such as stocks, currencies, bonds, etc. and pick the best ones for the portfolio. So basically, you are buying and selling those investments on behalf of the hedge fund for the corporations and individuals. You could also be partial if nor entirely responsible for the client relations and explaining investment strategies.
  • Prerequisite: The job as a fund manager would require more experience than managers and analysts who usually begin their careers as hedge fund analysts.

Example

Let us understand the concept of quantitative hedge fund jobs with the help of a suitable example, as given below:

We assume Max is an investment professional, with a 4 years’ experience in the Hedge fund industry. He has a bachelor’s degree in economics and an MBA in finance. He has good communication skills, presentation skills, in depth knowledge about the trends of the financial sector. He is currently working as an analyst and wishes to upgrade himself to a manager.

Thus, his job description may include work like guiding a team in planning, scheduling and reviewing deliverables to clients, preparing NAVs, portfolio pricing, keeping track of any corporate actions which should reflect in the financial statements, dividend reconciliation, keeping track of management fees and any accruals, processing over-the-counter derivative contracts, providing support in preparing financial statements and their audits along with identification of necessary documents needed to meet the same, preparing reports for clients and ensuring that work is done within the allotted time.

As seen above, the responsibilities involve a lot of complexity and skill which demand a high level of proficiency along with performance by putting extra working hours.

Video Explanation of Hedge Funds

 

Job Description

Hedge Fund Jobs are n’t the type that you can pick up straight after an MBA degree. The size and structure of the fund decide the positions, which are where the candidate would be eventually placed depending upon the academic credentials and skills.

The hedge fund job positions generally include being a junior trader, strategist, analyst, quantitative, software developer, risk manager, and various administrative roles. To finally get into any of these roles and enter the hedge fund careers will require specific credentials and preparations, discussed in the below infographics.

Hedge Fund Job Essentials

Skills

Listed below are the skills or characteristics that are required for hedge fund jobs.

  • High intellect
  • Confidence
  • Competitive
  • Strong domain knowledge
  • Consistency and accuracy
  • Deep investing and finance knowledge
  • Financial Modeling Skills
  • Strong quantitative and legal skills

Apart from these, you need to feel the financial markets and sense the changes and act accordingly. The essential quality expected is credibility as you would be handling a massive sum of money coming from the public.

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Career Track

There cannot be a very typical hedge fund career path or hierarchy in the hedge fund organization strategy as it depends a lot on the size. There could only be two titles, such as the analyst and portfolio manager, excluding the fund manager.

For more significant firms than this, they could have more complex structures that could include multiple portfolio managers, managing directors, intermediate vice presidents, etc. Have a look at the hierarchy and their role below starting with the highest position first:

#1 – Hedge Fund Manager Job

  • The hedge fund manager’s job is responsible for directing the activities related to the operation of the fund.
  • They decide on the composition of the fund’s portfolio and look after its daily affairs.
  • Speaking about finance hedge fund jobs compensation, they are compensated generously, but they also face tremendous pressure because of the high risk of the portfolios they manage.

#2 – Portfolio Manager

  • This hedge fund job involves making hedge fund strategy and making investment decisions and allocations.
  • The portfolios are compensated via a modest management fee and a performance fee based on the fund’s annual performance.
  • Fund managers only get a performance fee if the fund makes money.

#3 – Hedge Fund Analyst

  • Those who start their hedge fund career usually begin with a hedge fund job as a junior hedge fund analyst.
  • As an analyst, you would conduct due diligence on investment decisions to conduct in-depth research and analysis and support the team of senior analysts and portfolio managers.
  • After working for say about 2-4 years, based on your performance, you would be promoted to a senior analyst position.
  • At this level, you are expected to have a thorough knowledge of derivatives and financial products of the fund, directly reporting to the Chief investment officer.

#4 – Hedge Fund Trader

  • Traders with finance hedge fund jobs are considered to be the soul of a hedge fund firm.
  • Quantitative analysts work along with traders to create trading models based on Statistics and Computational Mathematics.
  • The traders are the ones who execute the strategy created by the portfolio managers. A decent educational background, coupled with trading experience, could get you at this job.

Like in the case of a career as a hedge fund analyst, we have Junior and Senior level traders. A junior trader would have a degree and about two years of work experience. After working for five years or so, they might move up the ladder to become a senior trader. Within the traders’ clan, we have the execution traders who execute the trade or ideas of the research team, and others do both the tasks of generating ideas and implementing them.

Salaries

  • If you are someone with a few years of experience in Investment Banking, you would usually start with a basic salary (excluding bonus) of $75,000-$125,000. The compensation would vary according to your and the funds’ performance but is usually 2-3x of your basic salary.
  • As a senior in this profession, you would earn anything between a couple hundred thousand USD to $1 million, $10+ million, or even more. These vast figures could get inspiring but keep one thing in your mind straight; your bonus would entirely depend upon the funds’ performance.
Hedge Fund Salary

You may find the salary numbers in hedge fund jobs unusually high, but of course, many others make much less and many more who fail altogether. All who participate in this industry take on high risk. It would eventually boil down to skill, timing, and a little luck. In a recent salary review of starting compensation for recent graduates of the most extensive MBA programs, the highest average starting pay was hedge fund jobs.

According to Robert Half Accounting & Finance Salary guide (2015), hedge fund management firms are hiring and are in particular search for the positions of senior-level talent to manage the portfolio companies, trade support, and middle office professionals, and also people with capability in accounting and Finance for fund accounting, taxation, and investment valuation analyses.

The below diagram explains the average salary for various hedge funds jobs during the years 2014 & 2015 and shows an increase of approximately 3% over the previous year.

Hedge Fund Salary Change
  • It is important to note that the income of a hedge fund manager is majorly dependent upon the Hedge fund that is created then only on the base salary.
  • The payment structure you would have as a fund manager would include a fee for managing the fund and a performance bonus depending on how the fund finally earns.

Pros And Cons

Looking at the brighter side of the hedge fund jobs:

  • Hedge fund jobs allow a greater level of individuality than other areas of the domain.
  • Compared to the investment banks, the hedge fund is generally smaller, which gives them greater intimacy and control.
  • It can be considered a highly rewarding hedge fund career; it is not uncommon to see people in this field at significant funds pulling down $5 million a year. It is so because, in hedge fund jobs, one can easily quantify the contribution to the total profit of the fund.
  • You have the opportunity to do well and get noticed quickly. This can help you in getting up the ladder rather sooner and get compensated well for the same.

Looking at the darker side:

  • Many haven’t been able to survive the competition and pressure and have failed miserably in hedge fund jobs. In such cases, one can be easily kicked out of business as there is room for failures.
  • Managing the hedge fund is not an easy task as it entails a lot of responsibility. This is because the investors hand over a massive amount of money with a promise of guaranteed return regardless of the market condition. To do this, the hedge fund manager and others involved need to apply hedge fund strategies. Hence someone cannot start managing those funds and requires experience to do it efficiently.

Few Guidelines for Getting Hired

  • Check whether your personality suits the intense environment of Hedge fund jobs. The competition here is to outperform and have the edge over your other counterparts.
  • Learn to analyze and synthesize data quickly.
  • Quantitative knowledge and capabilities.
  • Make contacts and network with people in the hedge fund industry.
  • Prove serious dedication for a hedge fund job.
  • It is essential to do your homework well before so that you are alert of the kinds of investments a fund makes and how they work.
  • Dedication towards Finance field with certifications like CFA, FRM, CPA, etc.

Hedge funds careers are here to stay. The industry is going to grow and get competitive with time. But it would help if you were sure of why you want to get into hedge funds. Would it be work or money? Make sure the work excites you and not just the money. This field requires passion about investments & markets, not because they want to make a few million bucks. Good luck to you as you envisage a Hedge Fund job.

This has been a guide to what are Hedge Fund Jobs. We explain their salaries, job description, example, types, pros and cons, skill & career track. Here we also discuss the salaries of hedge funds and top tips to get hired in a hedge fund. You may also learn more about hedge funds from the following articles –

Reader Interactions

Comments

  1. Akshay Pareek says

    Dheeraj, you’re doing a great help to toddlers like me.. Can you plz tell me what kind of software knowledge is needed for both equity research analyst and as a hedge fund analyst.

    • Dheeraj Vaidya says

      Hi Akshay, For equity research not much of software knowledge needed. You need to master Excel.
      For hedge fund analysis, you are expected to be great at quant stuff and some programming languages like R, Python etc (depending on which role are you in).

  2. Sam says

    Hi, I am an electrical engineering graduate and would like to enter into the hudge fund market. How can I find such a job or prepare myself for one?

    • Dheeraj says

      Hi Sam,

      Best way to do prepare yourself for this is to take some certifications like CFA or FRM as it will provide you with financial understanding. In addition, it will boost your resume.

      Thanks,
      Dheeraj

  3. Wayne says

    Hi. Can you list a few hedge funds in India? Is the CFA certification a must to join a hedge fund?
    Thanks

    • Dheeraj says

      Hi Wayne,

      It may not be absolutely necessary for you to take CFA certifications in order get into hedge fund. Here is the list of hedge funds in India

  4. Wayne says

    Hi, I am currently working in operations at an investment bank. How do I make the switch to a hedge fund?
    Do I need to do a CFA course? Also, can you list a few hedge fund firms in India.
    Thanks

    • Dheeraj says

      Hi Wayne, In order to make a switch from your current role in operations into a hedge fund, you will require some certification that authenticates your knowledge in finance. CFA course can be a great start.

      Best,
      Dheeraj

  5. Carla says

    The article is very informative! I soon wish to switch my career from Investment banking to hedge funds and this has provided me with the overview of the industry really well. Thank you so much.

    • Dheeraj says

      Thank you Carla! I am glad you found this article usefu!

  6. Sudipto Biswas says

    Quite insightful information for someone like me who wants to make a career in hedge funds. I have got some clarity as to how the industry is structured, so thanks a lot for this. I believe working in hedge funds would be better if I have some prior experience in sales trading?

    • Dheeraj says

      Hi Sudipto,

      Thanks. Having an experience in Sales & Trading will be of sure help for an hedge fund analyst. However, if you are getting a chance to move into Hedge fund directly, then why not take it.

      Best,
      Dheeraj