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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 operation, which offer the opposite experience.

Hedge Funds Are Like Snowflakes

Each hedge fund is unique, established in its own way. As a result, one should use caution when making generalizations. For example, the responsibilities associated with job titles can vary considerably from one firm to another. This is typically a function of the firm’s size, with smaller firms folding in higher levels of responsibility in single job title than one would see in the identical job title in a larger firm. This is why there can be widely disparate salaries when comparing job titles in small vs. large-sized firms. For this reason, smaller firms pay typically pay higher salaries and bonuses for a particular job title in the firm when compared to a larger firm. For specific examples and further clarification, read the 2017 Hedge Fund Compensation Report, which covers the topic in greater depth.

First Quarter Trends

According to the HFObserver, which tracked more than 1100 hedge fund job moves in 2017’s first quarter, Ken Griffin’s Chicago-based Citadel led the pack by hiring more than fifty staffers, while Bridgewater Associates and Balyasny Asset Management, each added between 30 and 50 new hires.

The bulk of Citadel’s hires were front-office investment roles comprised of analysts, portfolio managers and traders, with most being senior hires. Citadel’s hires ran the gamut, from conventional financial and research analysts, to analysts with strong quantitative, market data, and machine learning backgrounds and software developers.

In contrast, HFObserver reports that Millennium Management hires were weighted in favor of the usual finance and research analysts with sector-specific experience.

The Surprising Trend

The surprising trend is that there is no trend. As was said earlier, hedge funds are not snowflakes. Each hedge fund makes its personnel decisions based upon unique needs, strategies and cultures. Hedge fund managers, administrators and analysts do not share a common background. Hedge funds are acquiring staff with the skills, background, and education that best suits its unique needs.

What This Means for Jobs

Anyone looking for one of those hundred hours per week jobs can surely find one. However, there is hope for those who seek a position in a hedge fund that offers more opportunity for work/life balance.

For example, a position in administration has little to do with trading. Such positions focus on client relations, accounting, reporting and myriad other functions that keep the firm humming. Make no mistake, these positions are not easy jobs, but they are often less stressful than the work of a hedge fund manager or analyst.

The takeaway is that the hedge fund industry is wide open to a vast variety of skill sets and backgrounds. Never sell yourself short—no pun intended.

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President Trump’s executive order, signed January 30 of this year places Dodd-Frank squarely in the administration’s cross hairs. The impact of this executive order would not be so daunting if the legislative process had not been outsourced to the Federal agencies charged with implementing the legislators’ perceived wishes through regulation—a defect that future lawmakers might want to amend.

The driving force behind all that is wrong with Dodd-Frank is regulation rather than law. As a result, the President is using his legal authority to undo these regulations. It is this legislative shortcoming, which allows the President to act as he sees fit for the economic well-being of the country.

A Modest Beginning

Although the loophole is a large one, Trump seems content, at least for the moment, to halt the promulgation of new regulations by mandating that two be withdrawn for each new one that is promulgated. This executive order will act as a powerful brake against the proliferation of new regulations. However, what happens if undesirable regulations remain in force?

The answer rests, in part, with the results achieved under the mandates that follow in Sections 2 and 3 of the executive order. In short, this demands a review by agency heads of existing and repealed regulations to ensure that increases in regulatory costs to the private sector are held to zero. Any deviations must be approved by the Director of the Office of Management and Budget unless the offending regulation is required by law or preapproved by said Director.

However, the teeth bared in this executive order can be found in Section 2, subsection (d) that states, “The total incremental cost allowance may allow an increase or require a reduction in total regulatory cost.”

Going Forward

Clearly, the President can choose the latter course and require reductions in the total regulatory costs of sundry Federal agencies, but, for now, he seems content with the “make-one-lose two” approach.

Nonetheless, the law firm of Cole-Frieman & Mallon LLP, in a letter to clients, friends and associates, stated that, “While a repeal of Dodd-Frank is unlikely, the coming months may bring a number of deregulatory changes.”

The firm’s letter touches on several regulatory initiatives but one is of particular interest to the hedge fund industry. It reminds us that California’s Public Investment Fund Disclosure Requirements have been in effect since January 1, 2017. This legislation mandates additional disclosures from hedge funds and other alternative investment funds that handle investments from California’s state and local public pension and retirement systems. If your firm has investments of this type, be prepared to respond to questions regarding fund fees, expenses, and performance that may go beyond the levels of transparency to which your firm is accustomed.

What About Hedge Fund Jobs?

Readers in the compliance arm of the hedge fund industry may be feeling some level of insecurity. Be assured that these concerns are likely without merit. In fact, compliance personnel will probably find themselves busier than ever as they digest the impact new, as well as repealed regulations, will have on their firms. Then there are always the states to contend with, as we have seen with California. One might even find himself in a position to seek a salary increase.

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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 Jobs and the Rise of the Machines

April 3, 2017

Robots, once the bane of blue-collar workers, may now threaten the livelihoods of hedge fund professionals. Taxi and Uber drivers are menaced by driver-less technology, fast food workers are marginalized by robots capable of making a burger in less than ten seconds, and BlackRock, Inc. is implementing data-driven, artificial intelligence (AI) programs that will ultimately […]

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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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Surprisingly Investors Remain Bullish on Hedge Funds

March 5, 2017

After an inglorious 2016, many pundits jawbone about a continued investor exodus from the so-called overpriced and underperforming hedge fund industry. However, the facts are in stark contrast to the rhetoric. January 2017 redemptions total $5.2 billion, about one-quarter of the $19.3 billion outflow the hedge fund industry experienced in January 2016. Furthermore, a substantial […]

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Will Trump’s Core Regulatory Principles Favor Hedge Funds?

February 20, 2017

On February 3, 2017, President Trump signed an executive order that outlined his administration’s core principles for regulating the U.S. financial system. They are: (a) empower Americans to make independent financial decisions and informed choices in the marketplace, save for retirement, and build individual wealth; (b) prevent taxpayer-funded bailouts; (c) foster economic growth and vibrant […]

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