Hedge Fund Structure and Culture

The founding partner of a hedge fund is often the portfolio manager and will be involved in overseeing investments, making trading decisions, hiring and firing, supervising accounting and operations and monitoring risk.

Because of the smaller size of the firm, principals and senior managers often take on multiple roles, including human resources. It’s not uncommon for vice presidents and even partners to review resumes and be involved in interviewing prospective employees. Another partner may take on responsibility for overseeing the operational side of the business. In general, a hedge fund culture is small, entrepreneurial, meritocratic, and run like a small business.

The culture of a hedge fund will also vary depending on the nature of its investment strategy. For example, a fund that is heavily quantitatively oriented such as a statistical arbitrage hedge fund will be staffed with PhD’s and “quants” who are typically more introverted and enjoy crunching numbers behind computer screens. A global macro fund, on the other hand, may have more extroverted types who enjoy watching the markets from a trading floor and sharing ideas.

Overall, hedge fund culture is less structured and more relaxed than other jobs in finance but every bit as demanding intellectually. The success and performance of the firm’s investments are paramount, and that tends to focus everyone into a cohesive team.



Yale School of Management   www.som.yale.edu

Schwab, Claude. Hedge Me: The Insider’s Guide: U.S. Hedge Fund Careers. Lynx Media.

Davare, Aditi A., Goodrich, Holly S. Vault Career Guide to Hedge Funds.

Bookmark and Share

Comments on this entry are closed.

Previous post:

Next post:

Real Time Web Analytics