Is a Hedge Fund Job Right for You?

Unlike a typical mainstream fund like an investment fund that standard investors can purchase via a broker, hedge funds are very similar to a private equity fund. The term originated with “hedging” strategy utilized by fund managers in the 1950’s to the 1980’s; referring to their attempting to offset any risk involved with an investment position in a specific portfolio.

A good hedge fund job requires that you have nerves of steel, keen insight and the ability to balance complex positions simultaneously – as a typical hedge fund job requires purchasing a long position and a secondary short position in a similar security, enabling you to offset price fluctuations and market conditions.

Hedge Funds Brief Overview

 Most hedge funds vary in size, ranking from just a handful of employees into the hundreds, making it hard to standardize the corporate culture of a hedge fund job. Many of the smaller hedge funds are run very much like a small business, with a corporate culture that is in most cases determined by the CEO/owner, or the hedge fund manager. The hedge fund manage is typically in charge of the entire operation and may have in many cases started the fund.

Hedge Fund Jobs

Your hedge fund job may vary tremendously from one hedge fund to another – just like an investment bank, an individual who started as a trader will most likely have a similar position in a hedge fund. In a smaller hedge fund your hedge fund job may have different responsibilities which are typically determined by the actual size of the fund. At a smaller fund, the traders will usually be involved with the actual operations of the trade. In a larger hedge fund there will usually be a unique operations person or even department that handles these responsibilities.

Working at a hedge fund job is not like working at an investment bank or even a mutual fund. The vast majority of hedge funds don’t have a large human resources, marketing or operations staff. Many of these tasks are handled by the actual hedge fund manager. As a result, the manager is usually very busy and the hedge fund employees are expected to pick up the slack and even assist with interviewing new employees, working on marketing projects and helping out in an operations capacity when need be.

Would a Hedge Fund Job be Right for You?

Because most hedge funds are very dynamic companies and can be very lucrative for the employees competition can be extremely fierce for hedge fund jobs.  An MBA may or may not be beneficial when applying for a hedge fund job – as many managers prefer to hire people with a demonstrated track record, or that have been referred by someone in the firm or that they know.

In most cases to be qualified for a hedge fund job you should have experience in investment banking, private equity, accounting, consulting or some type of M&A deal experience in a corporate environment.

When weighing your chances for a hedge fund job remember to focus on what value you are able to bring to the table for the hedge fund’s analysis and decision making processes. Case in point, do you have industry knowledge, a network of contacts in a specific industry, capital structuring experience, strategic analysis or modeling skills, etc.? Since competition can be very strong, you must provide the firm with a skill set that is strong and the more diversified the better.