How to become a Hedge Fund Manager (2024)

FAQs

How long does it take to become a hedge fund manager? ›

At least 10 years of investment experience and a proven performance record are required to become a hedge fund manager. Hedge fund managers need excellent investment, analytical, and stock-picking skills in order to effectively manage their fund and generate strong returns for investors and general partners.

Most companies require their hedge fund employees to have a bachelor's degree in finance or economics. At the same time, many companies also require a master's degree on top of that, so a hedge fund manager would normally have at least these qualifications.

The appeal of full autonomy and benefitting directly from your results can be hard to resist. But the reality often proves far more challenging than the fantasy. Running a hedge fund requires investment prowess, operational expertise, entrepreneurial drive, and business development skills.

A hedge fund manager is a financial adviser who oversees investment accounts, leverages advanced financial software and raises expenditure capital. You can become a hedge fund manager by obtaining at least a bachelor's degree, earning CFA certification and gaining experience in the finance industry.

Who Is the Richest Hedge Fund Manager? Ken Griffin of Citadel is both the richest hedge fund manager and the highest paid. In 2022, he earned $41. billion, and by the beginning of 2023 his net worth was estimated at $35 billion.

Hedge fund managers typically earn above-average compensation, often from a two-and-twenty fee structure. Hedge fund managers typically specialize in a particular investment strategy that they then use to power their fund portfolio's mandate for profits.

The downsides are that your exit opportunities out of a hedge fund will be more limited, it's still a very stressful job even though you work fewer hours, and if your fund blows up or otherwise shuts down, you'll be out of a job.

Hedge Fund Analyst Hours and Lifestyle

At smaller, single-manager funds, the average might be 10-12 hours per day, for a total of 50-60 hours per week (weekend work is rare). As you move to larger, multi-manager funds, the hours and stress get worse, so the average may be more like 60-70 hours per week.

A Bachelor of Science (B.S.) degree in finance is ideal for a variety of hedge fund jobs, but your major will matter. Bachelor of Science degrees in mathematics, accounting, physics, computer science, and even engineering are also useful, given the recent rise in algorithmic trading.

They found that the median age of a hedge fund manager is 48. The majority of hedge fund managers are between 40 and 60 years of age.

What does a hedge fund manager do all day? ›

A hedge fund manager is responsible for overseeing investment accounts, typically at a hedge fund. They help investors manage investments, tracking liquidity and giving advice about fees. In addition to direct associations with a hedge fund, fund manager jobs are found in environments including: Asset management firms.

Hedge funds are investment vehicles known for their potential high returns, but they come with significant risks. These risks include market volatility, leverage and less regulatory oversight when compared with traditional investments.

Hedge fund managers are acting investors, so they do not need to take FINRA's Series 7 exam. However, they may need to get a Series 65 license or abide by any other licensing requirement set by their state.

Understanding Who Can Start a Hedge Fund

You need a strong background in finance, investment management, or a related field. Experience in trading, portfolio management, or working with institutional investors would be great. It also helps to have a successful track record that can attract initial investors.

It is not uncommon for someone with 5 to 10 years of experience (if they last that long) to secure hedge fund salaries that are close to US$ 1 million per year. If you start your own hedge fund, though, hedge fund salaries get a little more complicated.

They found that the median age of a hedge fund manager is 48. The majority of hedge fund managers are between 40 and 60 years of age.

As with sales and trading jobs, it helps to start off as an intern. But be warned: winning a place on a hedge fund graduate program or internship is exceptionally tough. Hedge funds hire a lot less people than banks.

The money is a big draw as well: if you're at the right fund and you perform well, you can earn into the mid-six-figures, up to $1 million+, even as a junior-level employee. The top individual Portfolio Managers can earn hundreds of millions or billions each year.

Even entry-level hedge fund positions tend to pay well. For example, junior analysts receive an average of $81K annually. Hedge fund analysts earn between $75K and $120K in base salary and approximately $19K-35K in performance bonuses. Risk managers can expect to earn an annual salary of over $100K.