How To Become a Hedge Fund Manager
By Indeed Editorial Team
Updated February 22, 2021 | Published February 4, 2020
Updated February 22, 2021
Published February 4, 2020
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
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If you enjoy learning about investments and the financial industry, a career as a hedge fund manager may interest you. Becoming a hedge fund manager typically requires extensive investment knowledge, many years of financial experience and a passion for helping others meet their investment goals. Though it takes an extensive amount of work, the outcome can be rewarding and financially beneficial.
In this article, we learn what a hedge fund manager is, how to become a hedge fund manager and answer common questions regarding a hedge fund manager career.
What does a hedge fund manager do?
A hedge fund manager is a financial professional who collaborates with businesses to advise them on how to manage their short-term and long-term hedge fund investments. A hedge fund occurs when professionals with a high net worth all pool their money together to make a large investment in financial resources like bonds, commodities or equities. Hedge fund managers educate their clients on certain fee structures and liquidity to best determine which investments are the most beneficial to pursue.
They may use advanced financial software to gather data to determine which investments have been successful and other financial investments their clients should make. Hedge fund managers also regularly review their client's account accruals, expenses and balances to determine if there are any necessary improvements to be made or accounts that need to be reconciled.
Average hedge fund manager salary
National average salary: $91,468 per year
Hedge fund managers usually work for investment or financial companies. They often work average full-time hours, but may need to assist their clients outside of the regular work schedule. Hedge fund managers often receive compensation if they advise a client to make a financially successful investment. If a client's investment earns them more money, a hedge fund manager may also receive a portion of those funds.
How to become a hedge fund manager
Becoming a hedge fund manager often takes dedication, experience, research skills and networking abilities. Follow the steps below to pursue a position as a hedge fund manager.
Conduct extensive industry research.
Receive the necessary education.
Network with other hedge fund professionals.
Gain a professional career in finance.
Participate in an internship.
Search for hedge fund manager positions.
Apply for hedge fund manager jobs.
1. Conduct extensive industry research
Becoming a hedge fund manager involves having a strong knowledge of the financial, hedge fund and investment industries. You can gain this by searching for numerous resources both online and in person. Here are a few ways to obtain resources that can help you gain knowledge on hedge fund management:
Purchase or borrow books about investments or hedge fund management.
Subscribe to hedge fund newsletters.
Research hedge fund articles online.
Join a hedge fund association.
These can help you discover more about what a career in hedge fund management entails as well as what type of education or skill set many investment or financial institutions prefer you to have.
2. Receive the necessary education
Certain educational courses can teach you more about the financial and investment industry. Many companies require their hedge fund employees to receive at least a bachelor's degree in finance or accounting. Though it isn't always required, hedge fund managers may choose to further their education by receiving their Masters in Business Administration to study finance.
Another option aspiring hedge fund managers pursue is receiving their chartered financial analyst certification credential. A CFA is a highly professional credential that requires candidates to pass three levels of exams testing them on risk management, ethics and portfolio management.
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3. Network with other hedge fund professionals
To gain more insight into a hedge fund manager position and to learn how to become one, you can meet current and previous hedge fund professionals. Attending hedge fund networking events or joining associations can help you find hedge fund professionals who teach you more about the career.
Hedge fund management can often be a competitive career to pursue. Current hedge fund professionals can provide tips regarding effective interviewing techniques, what to include on your resume and which companies are the best to work at. They may even have connections of their own and can assist you in landing your first position as a hedge fund manager.
4. Gain a professional career in finance
Financial employers are typically interested in candidates with extensive and professional knowledge in the finance industry. Working in a finance career can help you gain more knowledge regarding investment techniques, financial management and funding strategies. Many employers expect to see at least three years of experience in hedge funds or investment areas. Gaining a professional career in finance can help you meet these qualifications.
5. Participate in an internship
Gaining hands-on experience can be an effective way to advance your industry knowledge and confirm if this is the career you want to pursue. You can shadow a hedge fund manager to learn their daily routine, gain insight on how to interact with clients and learn techniques for researching client investment opportunities.
Even if you have pursued a finance-related position previously, hiring managers may be more interested if you have specific hedge fund experience. It can be beneficial to pursue a part-time internship alongside your full-time finance career. This may increase your chances of landing a hedge fund management career if you have limited experience.
6. Search for hedge fund manager positions
Once you've received the necessary education and experience, you can begin your hedge fund manager job hunt. Search for job postings online and research each company you come across to read their reviews and gain an insight on other employees' experiences working for them.
Many hedge fund positions are only available through word-of-mouth communication. You can network with hedge fund managers at the Hedge Fund Association and Hedge Fund Group organizations to learn if any positions are open. You can also search the Chamber of Commerce listings online to find financial companies and begin cold calling them to learn if any opportunities are available.
7. Apply for hedge fund manager jobs
As you apply for hedge fund manager jobs, ensure your resume is professionally formatted and contains details regarding your experience. Hedge fund employers want to learn not only about your experience but also about the results you brought in at your previous employer. Include numbers, statistics and specific skills used when listing this experience on your resume.
Hiring managers will also want to learn what associations you're a part of and any certifications you've received that may better qualify you for the position. Listing these on your resume can make you stand out from the competition.
Hedge fund manager FAQs
Below are frequently asked questions regarding getting a career as a hedge fund manager.
What skills are needed to become a hedge fund manager?
The following are skills hedge fund managers should have to be successful in their role:
Critical thinking skills when determining which investment opportunities are the best for clients
Effective communication abilities when regularly collaborating with both clients and other employees
Strong analytical ability to study numerous financial and investment data or trends
Problem-solving skills to help provide solutions when an investment problem occurs
Attention to detail as they manage a client's financial portfolio and oversee any investment mistakes
Extensive knowledge of current investment and financial trends
Do hedge fund manager positions require any certifications?
Though some employers don't require hedge fund managers to have specific certifications, certain ones can look impressive to hiring managers. Many recommend that candidates receive their Chartered Financial Analyst certification and sometimes a Chartered Hedge Fund Associate certification.
The CHFA can help candidates learn more about being a hedge fund manager. You can get this certification by passing three levels of exams. Since the CHFA credential is less extensive and involves less studying, employers may value the credentials of a Chartered Financial Analyst over a Chartered Hedge Fund Associate.
What education is required to become a hedge fund manager?
Many hedge fund employers require employees to receive a bachelor's degree in finance or a related specialty like accounting or economics. Some hiring managers may require a master's in business administration as well.
The educational courses hedge fund management students should take include:
Composition and grammar
Advanced computer and financial software
Financial data reporting
Government and law
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