Industry

One of the main characteristics of developing a career in hedge funds is that the industry has its particular jargon, and anyone interested in working in one of these financial institutions needs to manage perfectly well in order to be successful. Most of the specific terms that any employee in this field should know are related to the operational aspects of the activity.

A hedge fund manager, or anybody working within a hedge fund, is expected to understand terms such as “hedge fund”, “hedge”, “selling short”, “derivatives”, “leverage” or “selling long”, and be able to use these with confidence. Doing so is the basic requirement for pursuing a successful career in hedge funds. Despite the fact that hedge funds have been a substantial part of the financial environment since the 1950s, even today there are a high number of people who are unaware of what hedge funds are, or of the activities a hedge fund manager does.

In fact, the industry as a whole is shrouded in relative secrecy, as there are few people acquainted with specific financial terms, let alone with those connected to hedge funds. Until the current financial crisis, pursuing a career in hedge funds meant entering into an ever expanding, growing industry; now, under the present financial crisis, the industry is growing at substantially lower rate, and developing a career in hedge funds can be difficult as many of these financial institutions have suffered severe losses. Anyone interested in pursuing a career in hedge funds can do so either with a small or within a large financial organization.

Some hedge funds manage vast quantities of money, whilst others satisfy the investment needs of smaller investors. There are plenty of different roles and positions that can be occupied within these organizations, depending on the size of the hedge fund.

On average, there is a hedge fund manager acting as the principal of the company, while other roles include a portfolio manager, a risk manager, a chief financial officer, a chief operations officer, research analysts, traders, accountants and operations staff. Having a bachelor’s degree, and experience in hedge funds and investing in general, are some of the basic requirements that anyone intending to develop a professional career in hedge funds should fulfil. For management positions, in general an MBA and extensive experience are required.

Most of the individuals that gain a position in a hedge fund learn about the availability of the position either through contacts or networking.