Do you really want to get into Hedge Fund Management?

Hedge fund managers are the whiz kids of the finance world, playing the markets skilfully and pulling in some of the highest salaries. A smart investment choice can make your company millions and one wrong move could spell disaster. If that idea gets your adrenaline pumping, read on to see if hedge fund management could be right for you.

Find out if this fast-paced, intense career has your name on it

What is hedge fund management?

Just in case you’re not up on your finance terms yet, we’ll get the definitions out of the way.

Fund

A pool of money from different investors, invested in a set of assets like bonds, stocks and property.

Hedge fund

A fund for experienced investors, designed to make money even when the stock market is losing value.

Hedge fund manager

The person who makes the major investment decisions for the hedge fund.

What does a hedge fund manager do?

Hedge fund managers monitor the stock market and choose which assets to buy. It isn’t just a matter of choosing assets likely to rise in value over time. They use a number of investment techniques to make money. Short-selling, leverage and hedging are just a few.

Hedge funds often use high risk investments that need to be constantly monitored. Hedge fund managers need to make decisions fast and communicate them with their team – the analysts who do the research and the traders who make the actual trades.  

Your working day

You start your day before the markets open so you can review your fund’s current position. After talking to your analysts about trade possibilities, you make some calls to find out more.

When the markets open, you watch the action to see if any of it affects your fund. Your traders let you know when opportunities come up and get your advice on how and when to trade. Then it’s a working lunch, split between meetings and checking the market on your phone.

After lunch, you check your stock positions yet again. You make sales calls to people who might invest in your fund and take calls from people who want you to invest in their stock. All the time, trading is going on in the background and your team is keeping you informed.

Once the markets close, you can have a final meeting to go over the day’s trading and plan for tomorrow. Then it’s time to have some fun – but don’t forget, the US markets are still open and you need to keep an eye on them…

What kind of person enjoys hedge fund management?

You thrive on stress

You need to be someone who gets a buzz from action and risk. This job comes with a health warning: it can lead to exhaustion and exacerbate anxiety disorders.

You’re fascinated by finance

In hedge fund management, you live and breathe the stock market. To monitor every movement and investigate every company takes real interest and enthusiasm. If you always choose business news over Buzzfeed, you might just have what it takes.

You’re confident in your abilities

With every investment you make, however well-considered, there will be an element of risk. That’s just how hedge funds work. Good hedge fund managers are confident and don’t second guess themselves. Once the decision is made, there’s no hesitation in making it happen.

You’re naturally competitive

Hedge fund investors often choose where to invest because of the skill of the manager. If you want people to invest with you, you don’t just have to beat the market – you have to beat the other fund managers out there. That means doing whatever it takes to win.

You don’t need your beauty sleep

The London Stock Exchange opens at 7am so you’ll be up and trading early. But that’s just the tip of the iceberg. Each exchange works at its own local time zone – the Tokyo Stock Exchange opens at 11pm and doesn’t close until the next morning.

Skills and qualities of a good hedge fund manager:

• Critical thinking
• Analytical skills
• Decision-making
• Multitasking
• Organisation
• Communication skills
• Numeracy

Getting a foot in the door

Get as much experience as possible via internships and work experience placements. They don’t have to be with hedge fund management companies. Anything that gets you more familiar with the stock market and more comfortable with financial terminology is worthwhile.

Make contacts. Network at careers fairs and try to make personal connections with current hedge fund managers. Find out whether any alumni from your university went into the sector and get in touch.

Avoid back office roles, except for short internships. It can be tempting to try for a job at a hedge fund working in IT or another support role. These are great jobs in themselves but they’re not a way in to become a fund manager. You’re much better off gaining experience in other investment-related roles.

View the latest investment banking internships.

Salary and perks

Two major attractions of being a hedge fund manager are the money and the lifestyle.

Salaries and bonuses are hundreds of thousands and fund managers typically have a share in their own fund – meaning that if the fund does well there’s no limit to the income.

Because hedge fund clients are very wealthy, you’ll be making connections with the rich and famous. You can expect to be invited everywhere and enjoy all the luxuries of other people’s wealth.

Of course, both the connections and the money depend on the fund’s success and can evaporate as fast as they accumulate.

If you’re looking to make serious money, plan on heading to the US at some point. Salaries there are significantly higher than their UK counterparts.

What to do afterwards

If you feel like a change, the connections you made as a hedge fund manager can get you in to other finance careers, such as:

• investment management
• private equity
• investment banking
• consultancy

And finally…

The dream of hedge fund management is that if you do well and save wisely you can retire early and do pretty much anything you want. These days, ‘early’ is more likely to be 40s than 30s but the principle is the same. Travel the world, write a book, start a charity, or be a stay-at-home-parent - the choice is yours.