Hedge fund performance tends to suffer in a bull market and the current bull market is on the cusp of moving into second place for longevity, unseating the 1949 through 1956 run, which currently holds that distinction.
The bull market has taken the lion’s share of the blame for the havoc wreaked on hedge fund performance, particularly those funds with an equity based strategy, yet hedge funds continue to attract assets.
Through the first six months of 2015, 417 hedge funds either closed or announced their intent to close, but in the same period, 516 new hedge funds were launched. While this seems encouraging, a report from Hedge Fund Research shows that these hedge fund launches represent less than one-half the number achieved in 2014. Even more troubling, the industry may be on track to deliver the fewest number of launches since 2010.
While the bull market may be the favorite “fall-guy” for this industry slowdown, other factors play a role in the diminished number of new launches, chief among them, increased regulatory burdens, uncertainties as to the direction regulators may take on tax issues like carried interest and malevolent attacks on the industry by politicians and some in the media. Another significant factor in this slowdown may be attributed to the ambiguity of the Federal Open Market Committee and its Chair Janet Yellen surrounding a rate hike. Business deplores uncertainty and a hedge fund is, after all, a business.
Hedge Fund Jobs
It is understandable that many aspiring to a career in the hedge fund industry might harbor a bleak view of employment prospects given the circumstances that have been outlined here. However, the current state of affairs does not signal the absence of job opportunities. Instead, it means that the competition for available positions will intensify. So the advice is, don’t panic, remain calm and enhance your value to any prospective employer.
Here are a few things you can do:
- Buff up your resume. As competition intensifies, the importance of a well crafted resume increases. Ensure that yours places your talents, accomplishments, skills and experience in the best possible light. If you have concerns, consider the services of a professional resume writer.
- Improve your academic credentials. Enroll in some online classes, pursue your MBA or take a class in cyber security. Not only will this increase your confidence level, it will demonstrate your initiative to prospective employers.
- Think about an internship. Although paid internships are few and far between, an unpaid internship can open the door to eventual employment.
- Obtain any needed licenses and certifications. Show potential employers that you are on your game. Make certain that you have the necessary licenses and/or certifications for the position you are seeking.
- Stay current with your network. Don’t miss an opportunity simply because you’ve lost touch with a member or members of your network. Keep your contacts fresh. Bring new ones on board whenever possible.
The hedge fund industry is a vital and vibrant one but fraught with the ups and downs every business encounters. Preparation and persistence will see you through.