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jobs in hedge fund

Hedge fund managers generally find their business from pension funds, foundations, endowments, and high net worth individuals.  Because hedge fund managers usually deal with entities that can withstand large short term fluctuations in the value of their assets, hedge funds are authorized a greater range of investment strategies.

Since some of these strategies used by hedge funds include short selling and leverage, most hedge fund managers need economic and market volatility to make a living (there are, of course, many exceptions to this generalization). This is in contrast to such financial careers as investment bankers and private equity professionals, where market volatility does not generally play into their hand.

Market Effects on Hedge Fund Managers

So, how has the recent economic and market conditions helped or hurt hedge fund managers?  Based upon estimates of the industry, the theoretical idea that volatility is good for employment only has limited applicability, with the main reason being that, although volatility may be good for many active hedge fund traders, many others’ use of leverage in times of declining equity prices only exacerbated their losses.

What’s happened to employment in the hedge fund industry the past decade?  Employment growth in the hedge fund industry had been fairly strong over the past ten years, growing by an average annual growth rate of about 13 percent.  The trend of strong employment in the industry hit a snag in the fall of 2009, declining by about 15 percent at its worst point.  The culprit, of course, was the financial crisis that surfaced in the fall of 2007, but really took full force in 2008 and 2009.

Since the summer of 2010, the year over year growth rate in employment has averaged around 3 percent, or about three times as much as the overall economy has grown over the same time horizon.  Some readers might find it interesting that the hedge fund industry is growing at around three times the rates of the overall economy even though the industry was blamed as a critical factor in the recent recession.  So, although some hedge funds surely blew it , there’s still a lot of trust out there.

Hedge Fund Employment Future

What does this all portend for the future of the economy’s hedge fund industry and its employment growth?  Well, although there’s growing competition from mutual funds that attempt to mimic as many hedge fund strategies as possible and there’s growing concern that hedge funds aren’t worth the money, the simple answer is that there continues to be strong demand for alternative methods for managing assets, and hedge funds are the go-to-guys when this question comes up.

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If you’re looking to break into the exciting world of hedge funds and alternative investing, but you’re not sure where to start, here is a great jumping off point: check out a conference!  Here are a few tips to make your conference experience both enjoyable and worth your time and money.

To choose which conference you go to, think about the following:

  • How much can you afford to spend?  Take into account the sometimes-outrageous conference fee plus travel costs.  Keep in mind you don’t have to stay at the hotel the conference is held in if it’s not in your budget.  Since most conferences are held in large cities, you can generally find a less expensive place to stay.
  • Is there anything in particular you’d like to learn about?  Search for a conference that interests you, or has at least one panel or speaker session that really intrigues you.
  • Is there anyone in the hedge fund world you’d like to meet?  If they’re a bigwig at one of the larger funds, there’s a good chance they’re speaking at a conference in the next year or so.
  • Is there a firm you want to work for but can’t get your foot in the door?  Take a look at both who’s speaking at the conference and who’s sponsoring the conference.

Once you’ve signed up for a conference, contact the conference organizer and let them know your situation, i.e. if you’re a student, recent graduate, or otherwise unemployed.  Ask if there are any invite-only events going on, and ask for an invite.  Many times, various firms or vendors will sponsor invite-only happy hours or dinners, and you can meet a great variety of people at these events.  They’re also generally more fun than the conference itself.

At the conference, dress appropriately.  Feel free to contact the conference organizer and ask about the dress code.  If in doubt, wear a well-fitting suit.  Make sure you look professional without your suit jacket so you can remove it at the conference if you look overdressed.

Also, be sure to check out the vendors.  You may meet one you’d like to work for, or you may meet someone that will help you later on in your career.  Treat everyone you meet as if they’re just as important as the CEO of the hedge fund you’re dying to work for.

Last important tip: watch your alcohol consumption at the conference, at any happy hour or dinner, and at the conference hotel.  If you’re new to this world, alcohol and finance go together like bread and butter.  Set a limit and stick to it.  If you don’t think you can do that, drink soda so it looks as if you’re drinking a mixed drink.  As fun as it can be boozing with important people, you don’t want to be remembered as the kid who yakked on the plant at the fancy restaurant.

Check out the following for upcoming conferences:

Enjoy your conference (but not too much)!

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High Profile Wall Street Bankers Head to Hedge Funds

July 2, 2012

The Volcker Rule is a specific section in the Dodd-Frank Wall Street Reform and Consumer Protection Act that prohibits proprietary trading by United States Banks and restricts these banks from sponsoring or investing in hedge funds. Banks will have to fully comply with the Volcker Rule by July 21, 2014 and this is impacting the […]

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Hedge Fund Career Opportunity Regulatory Compliance

June 11, 2012

Globally, regulators have been working towards a G20 agenda of introducing new registration and reporting rules for hedge fund managers. Both the Alternative Investment Fund Managers Directive (AIFMD) in the European Union and the Dodd-Frank Wall Street Reform and Consumer Protection Act in the United States are seeking to enhance the flow of information from […]

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Hedge Fund Compensation May Be Shifting

October 25, 2010

Another change looms for the hedge fund industry: compensation structures that could make hedge funds more “investor friendly.” Institutional investors are already rewriting the rules, and wealthy investors and family offices are sure to follow. The traditional hedge fund compensation structure has been “2 and 20”. A 2% management fee on assets under management (AUM) […]

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A Hot Hedge Fund Job Niche

October 18, 2010

Bonuses for the IT staff at hedge funds have doubled in the past year, despite the troubles affecting the overall sector, reports Network World. Hedge fund IT staff can expect bonuses in the 50 percent plus range, which is nearly double the 25 to 30 percent bonuses they received last year, according to data compiled […]

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Hedge Fund Manager among the World’s Youngest Billionaires

October 11, 2010

Hedge fund manager John Arnold, 36, made the list of Forbes Magazine’s youngest billionaires, with a net worth of $4 billion. Surprisingly, that only put him at number 212 on a list of 937 billionaires worldwide. Arnold started as an oil trader for Enron in the 1990s. When Enron collapsed, he founded Centaurus Advisors, LLC, […]

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