From the category archives:

Hedge Fund Jobs

Prequin reports the hedge fund industry has achieved gains in positive territory for 10 months in a row, with aggregate August gains of 0.97 percent. This is the longest streak of month-to-month gains since the financial crisis, and suggests the hedge fund industry has finally found its feet.

Investors Are Taking Notice

As has been noted in previous articles, hedge fund flows have been largely positive throughout these 10 months indicating renewed investor confidence.

According to HFR’s Market Microstructure Report, hedge fund closures fell to 222 in the second quarter, down significantly from 259 first quarter closures. Concurrently, 189 new funds launched in the first quarter of 2017 followed by 180 startups in the year’s second quarter.

The trend of closures outpacing new startups has continued throughout 2017, with 481 closures versus 369 startups through the first half of the year. Market forces continue to punish poorly performing funds and reward the best performing funds with continued inflows. Although the total number of hedge funds is in decline, assets under management have continued to rise to record levels.

No Crisis of Confidence

Based upon data provided by eVestment, hedge funds, taken together, are up 5.5 percent this year, just 20 basis points below full year returns for 2016. Another way to express this is that hedge fund returns have nearly doubled in 2017 as compared to 2016.

Large investors are beginning to recognize that the transition from hedge fund investment to cheap stock bets and private asset strategies have been costly. This is but one of several reasons that hedge funds continue to grow assets under management.

It is becoming clear to the investment community that disappointing hedge fund returns are proving to be more cyclical than structural. The post financial crisis spawned an FOMC policy of exceedingly low interest rates, which artificially inflated stock prices and other asset classes. As these policies normalize, hedge funds will rise. Expensive valuations and low returns are making investment in private equity, venture capital and other non-traded asset classes less attractive. Hedge funds are certain to be the beneficiary of investment shifts.

What about Hedge Fund Jobs?

As investors of all stripes return to the hedge fund fold, job opportunities in the hedge fund industry will continue to rise. Stock pickers, with a proven record of accomplishment may have the best window of opportunity. Hedge funds that pursue an equity strategy are at the top of the heap in terms of gains this year.

As a result, one is likely to witness a resurgence of funds that follow an equities strategy, manifested in startups as well as in existing funds shifting into equity. Startups may offer the best opportunities, as will funds currently pursuing equity strategies.

This, coupled with the overall growth in assets under management, will be the drivers of job opportunities in the hedge fund industry. Continued improvement in the overall performance of the industry will not only entice investors to return to the fold, but also provide increased job opportunities for those desiring a career in hedge funds.

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Male portfolio managers outnumber women 20 to 1. This might suggest gender bias on the part of hedge funds. However, it might also suggest that women aren’t seeking this line of work. How can the facts be known?

For example, 34 percent of doctors in the United States are female, about one in three. According to the U.S. Census Bureau, the number of men in the nursing profession stands at 9 percent. Is anyone suggesting that the nursing profession has a gender bias?

How about, dietitians, nutritionists, teacher’s assistants, and occupational therapists—only around 10 percent of these positions are held by men. Is this gender bias? Male conductors and yardmasters outnumber women 20 to 1. Where is the outcry? Isn’t the gender bias equally evident in this profession?

Is It Possible?

Let’s go way out on a limb here and consider the possibility that many women may not aspire to a position in the hedge fund industry. Of course, such a headline will not attract readers. It is much easier to malign an entire industry and gain clicks than it is to venture out onto a politically incorrect limb. However, for a variety of reasons, many men have no desire to work in the hedge fund industry either. That may say something about the hedge fund industry but, it certainly doesn’t say that it is prejudiced against women.

The Truth Is

Hedge funds would very much like to see more women entering the profession. In part, because of the bad rap the industry is confronting, but mostly because hedge fund managers are intelligent, and understand that excluding one-half the population diminishes their ability to find great talent.

The hedge fund industry is all about results and if women make those results happen, they will be welcomed with open arms. The industry is a meritocracy, not an old boys club. Headlines that imply gender prejudice in the hedge fund industry become a self-fulfilling prophecy. If women are led to believe that pursuing a career in hedge funds will result in a constant battle between the sexes, then fewer women will choose this pursuit. In short, those in the media making these assertions are creating unwarranted headwinds for women.

What About Hedge Fund Jobs?

If you are a woman, this is the best of times to pursue a hedge fund career, in part, because hedge funds are anxious to shed the gender bias label, but largely because there is a shortage of talent in the industry.

Hedge funds are finding high levels of competition with tech firms for talent, particularly for quant and data scientists. This talent, male and female, has their pick of places to work. This talent, regardless of gender, is seeking a modern and diverse work environment. Hedge funds must make a greater effort to accommodate them or they will bring their considerable talents to other industries.

Women harboring an interest for a career in the hedge fund industry will find no better time than now to throw their collective hats into the ring.

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What Career Paths Lead to a Job in the Hedge Fund Industry?

July 10, 2017

Contrary to popular opinion, earning an MBA will not necessarily earn you a spot in the hedge fund industry. According to the 2017 Hedge Fund Compensation Report, just 4 percent of those surveyed were hired by a hedge fund as students graduating with an MBA. This is not to minimize the value of an MBA in […]

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What Does an Analyst Do and What Do They Earn?

June 11, 2017

Although there are more than a few avenues leading to a job in the hedge fund industry, it can be argued that an analyst’s position is a typical entry-level position. Make no mistake; although the term entry-level often connotes the absence of a need for skills, education, prior experience or other attributes, this is not […]

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Hedge Fund Hiring in Quarter One

May 16, 2017

Many have the preconceived notion that jobs in the hedge fund industry entail hundred hour work weeks that wear down employees in a matter of months, not years. While it is true that a small percentage of firms may have this view, it is equally true that there are multiple roles in a hedge fund […]

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Hedge Fund First Quarter Gains Are in the Black

April 17, 2017

Hedge funds posted an aggregate 2.3 percent gain through the first quarter, which marks the strongest start for the industry since 2013. Long/short equity strategies lead the pack with composite returns of 3.2 percent. Back to Reality At first blush, this sounds terrific but, realistically, the industry is beating a very low bar—its own performance […]

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Hedge Fund Numbers Shrink as Assets Under Management Soar

March 20, 2017

The suggestion that assets under management are soaring is admittedly a bit Trumpian, but the fact is that the number of hedge funds shrank to 9,803 (including funds of funds) while 2016 industry assets under management climbed to just over $3 trillion according to the HFR Market Microstructure Report. What Can Be Inferred From the […]

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