Posts Tagged ‘hedge fund jobs’

Front Office Roles in Hedge Funds

Wednesday, May 14th, 2008

Front office Hedge Fund jobs include roles in portfolio management, research, marketing and investor relations.  These have always been the roles most professionals have strived to attain not only for the prestige that comes with the titles, but also the compensation which accompanies this prestige.  The question most professional have is how do I attain one of these roles?

Within a Hedge Fund there are two main career paths for these front office roles; the Portfolio Management/Research path and the Marketing/Investor Relations path.  I call these career paths because almost all front office position start out in the same areas and follow a progression to reach the more senior roles. For instance almost all Portfolio Manager start off in research.

Portfolio Management (PM) is the Holy Grail of Hedge Fund positions. This is the role most people dream about while sitting in their Economics 101 class in college.  These are the individuals you see profiled in the papers, not only for their investment ideas but increasingly for reports on their year end bonus checks-some as big as a billion dollars. 

In many cases the Portfolio Manager is also the founding partner of the firm, but these PM’s have had to follow the same career path and due their time as a Portfolio Manager for another firm before striking out on their own.  To attain this title you will have started off in the research department in most firms, and in a rare case the trading arena.  To be hired as a Research Analyst at a hedge fund, completion of an investment banking analyst program or equity research analyst program is typically a requisite.

Once you have started with a Hedge Fund the time it will take to become a Portfolio Manager depends on the firm.  I personally know of some firms which hope to turn Analysts into PM’s within 12 to 18 months.  Others firms believe in taking significantly more time to make this transition, still others will never turn an Analyst into a Portfolio Manager.  Once a Portfolio Manager has had some success they often decide at some point to strike out on their own in order to bring in bigger rewards while also increasing their risk profile.

The second path within a Hedge Fund is the Marketing/Investor Relations path.  This path is not nearly as structured as the Portfolio Manager path. The typical individual starts in an Investor Relations role learning how to work and communicate effectively with Accredited Investors including high net worth individuals, foundations, endowments and pensions.

Many professionals and investors may look at an Investor Relations role as reactive in nature, but the successful investor relations professional is always proactive. They are constantly servicing and communicating with the client. Strengthening the client relationship in good times can cause money to stay with the fund when the fund’s performance suffers. After a few years of servicing these clients and potential clients most Investor Relations professionals, especially those that have been proactive in their present role, will become marketers. 

The job of a Hedge Fund marketer is to gather assets for the firm.  This is done through many channels and usually includes a fair amount of travel and entertaining.  This is not usually a process which happens overnight and hence these Marketers have to stay very focused on their goal and follow a defined process.  It can take many meetings and conversations before a potential client is ready to invest.  Marketers are constantly meeting new people as well as following up and strengthening relationships with other potential clients.

The Investors Relations role teaches individuals how to work with clients but in a Marketing role they must both identify potential new clients and turn these new clients into investors. This is not an easy task and hence the compensation for these roles is typically very competitive and much higher then those of Investor Relations professionals.  As well marketing professionals usually have a performance driven component to their compensation.

Hopefully this posting will help you identify the career path you should follow to attain your goal within front office Hedge Fund positions.  Knowing that these paths exist and where they lead can help you make educated decisions as you advance your career in this space.

Final thought: The easiest way to see if these paths truly exist at your firm or a potential employer is to ask the senior individuals where they started in the firm.

Graduate Primer for Hedge Fund Job

Friday, May 2nd, 2008

Congratulations to all the soon to be College Graduates of 2008. You might be wondering how recent college grads obtain a job in the Alternative Investment space. The first thing to know is if you are graduating this month and are now reading this post with no job lined up – you are unfortunately well behind the rest of your peers in the job search and likely too late – but help is just below.

If you want a position with a Hedge Fund or Private Equity firm upon graduating from undergrad you typically need to start your process two to three years before your graduation date. The summer after your freshman year you need to find an internship ideally with a fund. For the next two summers you will want to have an internship as well. Also working with a fund during the school year is an excellent addition. If you have not had internships your chances just got a lot smaller.

Few College Career Centers inform their students of this but in the alternative investment space, internships are extremely important particularly if you do not want to head to New York City and spend 100+ hours a week working in an analyst program for the next 18-36 months.

To land a job without any internship experience means you must be persistent with the funds and dedicated to working your network and your school’s alumni network; many jobs in the hedge fund space are found through networking. You might also look at working with qualified recruiters who understand the business and can introduce you to strong firms. Look into to acquiring any of the designations which are valued in the Private Equity and Hedge Fund space. Unfortunately some of the designations take years to complete but starting the testing process can make your resume look stronger and show your passion for the industry.

In any case you will need to possess a well written resume and concisely express to those who are interviewing you that you are a driven, intelligent and mature recent grad looking to give your employer 110%. Make sure to discuss any leadership or team building roles you have had during college

If all else fails and you can afford it we recommend offering to work for free or a minimal fee for a month or two. One last thought - As the number of hedge funds grows so will their employment needs. With few hedge funds having a recruiting infrastructure in place a persistent and dedicated recent grad has an opportunity to enter this exciting and rewarding industry. If you want to work in the field and do not already have a position lined up you might want to consider doing some serious research these last few days before your don your cap and gown as opposed to spending it doing the normal senior slacking…

Welcome to Private Equity Jobs!

Thursday, May 1st, 2008

I want to personally welcome everyone to PrivateEquityJobs.com’s new blog. Our hope with this blog is to provide another tool to help educate industry professionals and passionate students about the private equity and hedge fund industries. Furthermore we hope to provide qualified knowledge in regards to the career paths and potential employment opportunities within these specific investment funds and the alternative investment space as a whole.

My hope is that with the help of our community we can become an interactive center of knowledge focused on careers and potential careers within the alternative investment space. I have spent the last 10+ years of my professional life working as an Executive Recruiter and Consultant to Private Equity firm and Hedge Funds.

This area of investing changes quickly and the employment opportunities in the space change on a regular basis as well. To fully understand the changes in the employment landscape you must understand the bigger picture of the alternative investment space; I intend for this blog to provide the solid understanding of the industry that you will need to be successful.

As the blog grows you will see that we have invited guest bloggers to write about certain subjects and provide for us another perspective on issues. We will try to make this blog as interactive as possible and ask that individuals with questions address those questions through our comment section at the bottom of each blog. I will do my best to answer each question either in the comment section or sometimes as another blog entry.

Thank you for your interest in our blog and PrivateEquityJobs.com, I look forward to hearing from our readers and building a dialogue with the community.

Simms Browning Founder & CEO PrivateEquityJobs.com