Hedge fund detractors, never weary of bashing the hedge fund industry, will see 2015 shaping up to be a substantial source of frustration. Why? Because hedge funds are a galaxy away from being down and out.
The number of hedge funds has grown from a post financial crisis low of 6,845 in 2009 to a total of 8,377 at year-end 2014, roughly a 22 percent increase over the past 5 years.
This is a remarkable revelation in light of articles such as this one in Business Insider, which decidedly failed to take into account the number of hedge funds that opened their doors in 2014, preferring instead to report on just one side of the balance sheet, an oversight which Alpha Calling addressed promptly.
Other financial reporters predicted CalPERS highly publicized decision to withdraw from hedge fund investments signaled the decline, if not quite the demise, of the hedge fund industry, citing high management fees and questionable performance as CalPERS basis for choosing to redeem.
However, on the heels of the CalPERS announcement, CalSTRS (California State Teacher’s Retirement System), made an equally public announcement affirming its intention to remain invested with hedge funds, a sentiment later echoed by many other public pension funds across the country. This positive news failed to gain the same level of attention given the CalPERS decision.
This May Be the Best Year in a Decade
Those seeking a career in the hedge fund industry may be entering the strongest hedge fund job market seen in a decade … and here are some of the reasons behind it.
1) The diversity of hedge fund strategies has broadened the field of talent and expertise needed to execute them. The range of hedge fund strategies, which include appraisal arbitrage, litigation finance, mergers, acquisitions and spin-offs, to name a few, requires individuals with knowledge and proficiency in areas previously under-explored by hedge funds.
2) Market uncertainty is reaching epidemic proportions, driving huge numbers of apprehensive investors into what is widely viewed as the relative safety of hedge funds.
3) Increasing numbers of hedge funds will be testing the retail frontier opened-up by the repeal of the general solicitation ban.
4) Large hedge funds with appropriate resources will expand into liquid alternative funds in an effort to tap into the multi-trillion dollar mutual fund market.
Don’t Allow a Flood of Negativity Drown Your Dreams
The media seems to have an axe to grind with hedge funds. While the reasons for this may not be entirely understood, evidence of it is no further away than the search button on your browser. If you aspire to work in the hedge fund industry, this flood of negativity can be daunting.
However, careful analysis and a little research reveal that the hedge funds are not only alive and well, but are enjoying something of a renaissance. In fact, 2015 may be the best year in a decade to pursue a career in hedge funds. Landing jobs in this field has never been a “cake-walk” but if you have the desire and skills to match emerging innovative strategies, 2015 could be the year your dream of a hedge fund job is finally realized.