Hedge Fund Research and other respected sources suggest that hedge funds, taken together, gained about one-half of one percent in the month of January, far short of the S&P 500’s gain in the same period. With January in the record books and the balance of 2017 stretching out ahead, what does the future hold for hedge fund industry performance?
Regardless of one’s politics, it must be acknowledged that there are great expectations for growth because of Trump’s proposed policies on regulation, corporate taxes and infrastructure spending. Arguably, this is confirmed by the equity markets, particularly the Dow, which has climbed almost straight up since Trump’s election.
The hedge fund industry will certainly welcome any relief from the crushing regulatory burden the Trump administration’s policies might offer. Executive orders have already been signed that herald the dismantling of Dodd-Frank.
Trump’s desire to spend $1 trillion on the nation’s infrastructure has potential for bipartisan support. If implemented, the prospects for job creation, increased tax revenues and corporate profits are very real.
Corporate tax reductions almost guarantee increased corporate profits, which will manifest in higher share prices.
Here Is the Rub
If President Trump is unable to move his initiatives forward in a convincing way, the expectation bubble will almost certainly burst, potentially derailing the bull-run and the prospects of a resurgent economy.
Given the level of animus displayed by those who oppose Trump and his policies, hedge fund managers and investors of all stripes may benefit from keeping their powder dry until Trump has proven his ability to move these initiatives forward.
Hedge Fund Jobs
Job prospects in the hedge fund industry run parallel with robust economic growth and sound markets. In the current environment, we have the expectation of both. Expectations, however, will necessarily give way to reality. That reality has not yet materialized and until it does, one cannot reasonably expect a surge of employment opportunities in the hedge fund industry.
Nonetheless, employment opportunities abound for hedge fund job seekers. According to the Hedge Fund Compensation Report, one in four hedge fund firms is hiring operations staff, two in ten are seeking help in legal, greater than one in ten are on the hunt for risk management personnel and three in ten firms have openings in research.
Using the very conservative number of ten thousand active hedge fund firms, this translates into 2500 operations jobs, 2000 openings in hedge fund legal departments, greater than 1000 positions in risk management and 3000 jobs in research. In these categories alone, more than 8500 positions are available to qualified job seekers.
As readers of the Hedge Fund Compensation Report can attest, job openings are not limited to those outlined above.
In short, regardless of whether or not Trump and his administration are successful in pressing their agenda forward, opportunities for employment within the hedge fund industry will persist.
To make the most of these opportunities, read the Hedge Fund Compensation Report.