Will Hedge Funds Win the High Stakes Race for Talent?

While there has always been keen competition for talent, the battle lines are being clearly drawn between the financial (particularly hedge funds) and the technology sectors. MBA graduates from the London School of Economics (LSE) have opted for the technology sector in large numbers since 2013, when LSE began splitting out the technology sector.

Forty-six percent of LSE graduates entered the financial sector in 2007…in 2017 that fell to 26 percent, a 43 percent decrease. Concurrently, technology’s share of graduates has increased from 6 percent to 20 percent, a greater than fourfold increase in a decade!

To counter this trend, the hedge fund industry is making dramatic changes in its campus recruiting style to secure its share of the talent pool.

In the Old Days

Time was, hedge funds did not have to go out of their way to recruit talent. For those inclined to search out a high paying career, hedge funds were the first choice. Hedge funds had the deepest pockets and when it came to bonus pay, the sky was the limit.

Well, times have changed—deep pockets are no longer the sole province of the hedge fund industry, in fact, many would argue that those pockets are shallower than ever before. North American hedge funds hold $1.66 trillion in assets under management. In contrast, the top three U.S. based technology companies, Alphabet, Microsoft, and Facebook, have a total market cap of $2.5 trillion. As a result, it has become necessary for the hedge fund industry to change course and revamp the way college recruitment is undertaken.

What Is the Industry Doing?

Hedge fund professionals have always been a breed apart, outliers in the financial sector, somewhat more dressed-down than banking professionals and content to be domiciled in Connecticut as opposed to Manhattan.

This trait has become a plus in the recruitment game…but it hasn’t been enough. Apart from phenomenal earning potential and a less stifling work environment, hedge funds are realizing that this generation of graduates desire work that has purpose beyond earning an outsized income.

Consequently, hedge funds are placing more emphasis on the fact that they are tackling challenging problems, such as big data, problems that need to be solved, rather than placing the emphasis on what they are trying to achieve. In short, the industry is trying to project an appealing image to a new generation of graduates, forcing a naturally secretive industry into the uncomfortable role of self-promotion and forging an aura of coolness.

As quantitative and quantamental hedge funds compete with technology firms for expertise in artificial intelligence, machine learning and big data analytics, they must also match the perks offered by the technology sector, which include, among others,  high starting salaries.

What about Hedge Fund Jobs?

One’s career choice should not be based solely on potential earnings. Work/life balance, aptitude, and enjoyment also play a role. Any Wall Street recruiting veteran will tell you that success in the hedge fund industry is proportional to one’s love for investing.

Recent graduates, with a genuine interest in investing, a love for the markets, and a degree that encompasses artificial intelligence, big data analytics or machine learning…this is your time.

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