If you love the idea of working in finance, becoming a hedge fund manager might be the career for you. This type of career is unique and can pay very well. You will need extensive knowledge of investments and finances, of course.
Before you decide to go into this type of career, you should know the job duties. Let’s look at the job duties and the steps to becoming a hedge fund manager.
Job Duties of a Hedge Fund Manager
You will be a financial professional when you work as a hedge fund manager. Your job will include working with businesses as an advisor. Hedge fund managers help to manage the short-term and long-term hedge fund investments for clients.
Most of your clients will be high-net-worth people. You will while your clients by suggesting investments in equities, bonds, and commodities. As a hedge fund manager, you’ll also help to educate your clients on the liquid and fee structure.
Working with advanced financial software is common for hedge fund managers. It’s also common to review client account accruals, balances, and expenses. These are just some of the common job duties of a hedge fund manager.
How to Become a Hedge Fund Manager in 5 Steps
Step #1 – Finish High School
You will need a high school diploma to become a hedge fund manager. This is just the start, as you will need to go onto college. Doing well in high school and scoring high on your SAT or ACT will help.
Step #2 – Get Your Bachelor’s Degree
You will need at least a bachelor’s degree to work as a hedge fund manager. This degree will likely need to be in finance, business administration, accounting, or economics. You will need to develop analytical skills while you’re in college, as well.
While you’re working towards getting your degree, you will likely complete an internship. This internship will be with a financial firm. You will gain hands-on experience during your internship.
During your time in college, you will likely study mathematics, statistics, accounting, economics, financial data reporting, asset management, and advanced commuter and financial software. Other courses in finance and business will likely be required, too.
Step #3 – Get a Master’s Degree (Optional)
Many top companies hiring hedge fund managers will require a master’s degree. This type of degree will put you above those without one. If you decide to get a master’s degree, you will likely need to complete an internship to graduate.
Step #4 – Gain Experience
Before you work as a hedge fund manager, you will likely work in an entry-level position. This position will be in finance and will allow you to gain some experience. Some management training can also be helpful.
Some of the most common entry-level positions include:
- Junior Traders – You will assist senior traders with day-to-day tasks including buying, selling, and shorting assets.
- Junior Analyst – An entry-level position including quantitative research, junior analysts will study trends.
- Research Analyst – You may need some experience to land this job. However, it’s still a lower-level position that will give you experience working with stocks, securities, and more.
These are the most common entry-level jobs to help you gain the necessary experience to become a hedge fund manager.
Step #5 – Gain Certifications
The finance industry has many certifications you can get. If you want to become a hedge fund manager, you will want to consider the following certifications:
Chartered Financial Analyst (CFA) – You can work towards the CFA certification after getting your bachelor’s degree. This certification will require you to pass three financial exams.
Certified Treasury Professional (CTP) – Another certification to consider is the CTP certification. It comes from the Association for Financial Professionals. You will need this if you work in the treasury industry. It required two years of work experience and passing an exam.
Registered Investment Advisor (RIA) – Getting the RIA certification is necessary for financial investors managing high-value funds. This certification will require you to complete the Series 7, 65, or 66 certification exams from the North American Securities Administrators Association program. You will need to pass the correct exams, as well.
Certificate in Hedge Fund Regulation (CHFR) – The CHFR offers a good option for hedge fund managers. You will need to gain knowledge of hedge fund federal regulations to get this certification. Passing an online course and exam is necessary.
These certifications can help you build the necessary resume to become a hedge fund manager. While these certifications are not required by all employers, some may require certification. The Chartered Financial Analyst certification is one of the most common you will need. It’s also common to need the Chartered Hedge Fund Associate certification.
Necessary Skills for Hedge Fund Managers
If you want to become a successful hedge fund manager, you need the right skills. Some of the best skills to develop include:
- Communication – Learning how to communicate with others is vital to your success in any career. As a hedge fund manager, you will need to communicate with investors, executives, and many others regularly.
- Mathematics – You must be skilled with math and numbers for this career. You will need to calculate deductions, percentages, and taxes quickly and accurately.
- Analytical Thinking – The ability to analyze is a big part of the job. You will need to make decisions properly and analyze data as a hedge fund manager.
- Attention to Detail – You will need to pay close attention to the details as a hedge fund manager.
There are many skills you need and many you will earn during college. However, you will also need to develop these skills if you want to be successful.
Frequently Asked Questions About Becoming a Hedge Fund Manager
How much can I make as a hedge fund manager?
The average salary of a hedge fund manager, according to Indeed.com, is about $94,500. Along with your salary, it’s common to earn about $13,500 in profit sharing each year. Some of the top employers will pay even more for good hedge fund managers.
You can earn more based on your location, too. New York is the highest paying location for hedge fund managers. Los Angeles, Boston, Washington DC, and Dallas also pay a higher-than-average salary.
How do hedge fund managers get paid?
You will likely get paid a nice salary as a hedge fund manager. It’s also possible to earn profit sharing, along with a commission or fee. The fee structure will likely include a small annual management fee and a performance-based fee.
On average, hedge fund managers with an MBA will earn between $90K and $120K directly out of school as a junior analyst. Top hedge fund manager salaries can be millions. The top manager actually earned more than $2 billion in 2013 and some of the top managers earned hundreds of millions of dollars, according to CareerTrend.com.
What type of benefits will I get as a hedge fund manager?
Your employer will likely provide access to many benefits. You might gain access to tuition reimbursement, a health savings account, a 401(k) with matching, and paid time off. Commuter assistance is also common, along with health insurance. Some companies offer an on-site gym, as well.
What type of work environment is common for a hedge fund manager?
It’s common to work in an office setting and spend time on a computer. You will likely use computer programs regularly to analyze trends and develop investment strategies. Frequent meetings with investors and executives can also be anticipated.
How many hours will I work every week as a hedge fund manager?
Working a 40-hour week is highly unlikely for hedge fund managers. You will likely work longer hours than just eight hours per day. Most hedge fund managers work overtime regularly.
While some managers may only work 40 hours per week, you will likely have to work up to this. Many new managers and entry-level workers will put in long hours including nights and weekends.
Do I need a degree to become a hedge fund manager?
Yes, most employers will require at least a bachelor’s degree. Several financial certifications also require a bachelor’s degree. Top hedge fund managers will have a master’s degree.
Along with a degree, you may also need accounting or business experience. Many employers look for three to five years of experience when hiring hedge fund managers.
Most people that have a knack for numbers might go into finance. If this is you, it’s possible you can earn a large amount of cash working as a hedge fund manager. Even average managers can earn a nice salary with six figures.
If you think this is the right career for you, make sure you look into it further. Getting a degree is necessary and a master’s degree is likely going to be necessary, too. Becoming a hedge fund manager isn’t easy, but it can be very lucrative and rewarding. Use the steps above to get started today.
Jordan Fabel
Covering different 'paths' that people's lives can take. Creative, foster parent, ticket dismissal, you get the idea. Exploring the requirements, certifications, exams, and obviously, approved courses along each path.