Richard Wilson has created one of the most visited web sites for those interested in the hedge fund industry over at HedgeFundBlogger.com. He has posted hundreds of articles about every facet of the industry. We hope to bring you more insights from Richard in the near future. In the meantime, we offer this advice from his site about preparing your resume for a hedge fund job interview.
There’s no perfect resume for a hedge fund job, Wilson says. Some hedge fund professionals have never even graduated from high school yet make over $1 million a year trading or selling for a particular fund. However, in most cases, there are a few factors that can help you land that coveted spot, including:
- Quantitative experience and abilities
- A CFA, CHA or CAIA designation
- Education — Ivy league background, an MBA or Quant-focused PhD
- Proof of loyalty, passion, and humility
- Something extra, such as PR expertise, asset gathering ability, or an information advantage
- High quality names from your last few hedge fund jobs will certainly help, such as large wirehouse experience
- And then results: how much money did you personally bring in to the firm or make for the firm in your last job?
In addition, Wilson says, you must have a stomach for a compensation structure that might be modest on salary and highly dependent on a performance-based commission or bonuses.
At a time when hedge funds are getting clobbered by the economic downturn and investor redemptions, one fund in the heart of the financial universe is quietly expanding.
Renaissance Technologies, a quantitative hedge fund shop based in Long Island, is subletting 6,700 square feet at 800 Third Avenue, according to Crain’s New York Business. The firm occupies about 40,000 square feet in Manhattan.
Renaissance or RenTech as it’s referred to, is one of the largest hedge fund managers in the world, with about $35.4 billion in assets under management as of October, 2007, according to bloggingstock.com.
The firm’s founder, James Simons, once taught in Harvard’s math department and has reportedly staffed RenTech with PhD mathematicians and scientists. His firm charges a 5% management fee and 36% of profits compared to the 2% and 20% model which is the industry norm. But his funds earned 43.6% annualized returns, net of fees, between 1996 and 2007, enough for him to pocked $1.7 billion in compensation.
You may recall that Simons was one of four top hedge fund managers, along with George Soros, Philip Falcone of Harbinger Capital, and Kenneth Griffin of Citadel Investment Group, who testified in front of a Congressional committee recently on the supposed dangers that hedge funds pose to financial markets.
Most hedge fund professionals receive no equity at all in their firm, according to the 2009 JobSearchDigest Hedge Fund Compensation Report. Among those who do share in the equity upside, a large portion said there is a vesting period in place for that equity.
A full 70% of respondents stated they receive no equity at all. 13% said they have less than 2%. And for those who do share in the equity upside, 43% said there is a vesting period in place for that equity. The data supports the thought a vesting period is becoming standard practice in the hedge fund industry.
Still, under 20% of traders and analysts have equity stakes in their firm (similar to last year’s finding). This year, 50% of portfolio managers reported having equity, up from 30% last year. Longevity with the firm plays an important part of an equity award. Last year’s report showed only about 6% of players with less than two years received equity; that number jumped this year to 25%. We view this as a fundamental shift in compensation practices in an attempt to improve hiring success and loyalty to the firm.
You can read the executive summary of the Hedge Fund Compensation Report at JobSearchDigest.com
