How To Become a Hedge Fund Manager (With Skills and Tips)

By Indeed Editorial Team

Updated 30 October 2022

Published 23 August 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A career in financial management is a good path for mathematically inclined individuals with strong analytical skills. The role of a hedge fund manager involves investing and building financial portfolios while developing financial strategies for clients to reach their goals. Learning the steps you can take to become successful in this role can help create career goals. In this article, we provide steps to qualify for the position, including education and experience requirements, define job duties, discuss skills that are most useful and give a career outlook.

Related: What Does Portfolio Manager Do? Role and Responsibilities

What is a hedge fund manager?

A hedge fund manager manages financial portfolios. They make investment decisions on their client's behalf and oversee hedge funds. A hedge fund is an investment fund of liquid assets. In a hedge fund, several contributors meet a minimum net worth to invest. The hedge fund manager applies the contributions as investments in stocks, bonds, real estate and more. Using analytical skills and financial knowledge, they develop fund goals and implement a strategy to help improve a client's portfolio.

In this role, you may expect the following responsibilities:

  • Offer investment recommendations to clients based on predictions and risk needs

  • Monitor investment performance and make decisions to buy or sell stocks

  • Communicate with potential investors to join the hedge fund

  • Update hedge fund members on progress and financial strategy

  • Keep up to date on government rules and regulations

  • Meet with clients to discuss financial goals

  • Analyse stock markets to identify opportunities

  • Prepare reports of financial activities

  • Meet with researchers and analysts to identify and discuss investment opportunities

Related: 8 Financial Career Options (Plus Top Jobs and Salaries)

How to become a hedge fund manager

Follow these six steps to guide your career path on how to become a hedge fund manager:

1. Complete a bachelor's degree

Most financial firms require at minimum a bachelor's degree in accounting, business administration or finance. Relevant coursework in maths and statistics can help you prepare for a master's programme. Students can develop important analytical skills and learn more about finances, hedge funds and stock investments while completing their degree.

2. Gain work experience with an internship

Many students also complete an internship with a financial firm. During an internship, a student gains hands-on experience in the field while making valuable connections with experienced professionals. This experience is great for building a resume and helps make connections with financial professionals. Some master's programmes require students to undergo an internship to graduate.

Read more: How To Get an Internship in 15 Steps

3. Earn a master's degree

Although not required, you can choose to earn a master's degree to expand your job opportunities. Consider relevant fields like finance or business administration. Many students pursue an internship while completing their master's.

4. Obtain certifications

You may choose to earn certifications to make you a more competitive candidate. Research potential certifications, understand their requirements and take the necessary courses or exams to earn them. Some certifications may require that you renew them every few years, so research recertification qualifications as well. For example, you may obtain a Certified Financial Planner Certification (CFP). This certification shows expertise in wealth management and financial planning. You can become certified through the Financial Planning Association of Singapore by taking a three-month course and passing an exam.

5. Apply for entry-level positions

Many hedge fund managers begin in entry-level positions, either as personal investors or traders. You might also look for open positions, such as an analyst, risk manager or junior manager, to help learn and gain experience managing a portfolio. This work experience can help develop your management skills and present opportunities to show your ability to manage investments and accomplish a client's financial goals.

6. Apply for managerial positions

Once you complete all educational and experience requirements, you can apply for open hedge fund manager positions. Be sure to highlight your work experience from interning and working entry-level positions at financial firms on your resume. Consider also submitting a cover letter with your application materials that showcase your skills and qualifications for the role.

Related: Why Creating Multiple Versions of Your Resume Works

Skills for a hedge fund manager

Some of the most important skills a hedge manager may possess include:

Analytical thinking

Analytical skills are crucial for making important decisions that affect the finances of all investors. The ability to gather and analyse large amounts of financial data allows them to create and execute a series of plans. These skills also help develop strategies for achieving the financial goals of their clients.

Read more: What Are Analytical Skills and Why Are They Important for Employment?

Communication

Advanced communication skills, such as persuasion and negotiation, are useful when growing their fund investor group. Written communication skills are also important, as fund managers often correspond with other team members and investors via email. Being able to simplify industry terms and discuss a portfolio with clients is an important aspect of the job role, where strong communication skills are necessary.

Attention to detail

Attention to detail is a skill that requires observation and analysis. Being detail-orientated ensures accuracy when reviewing financial activity and analysing investment opportunities. The stock market is, so it's important to pay close attention to any changes.

Mathematics

Financial careers rely heavily on using mathematics. The ability to calculate percentages, deductions and taxes quickly, while still being accurate, is essential. Strong mathematical skills may also assist with analysing and creating financial reports.

Related: What Does an Equity Research Analyst Do? Skills and FAQs

Problem-solving

As the manager of portfolios, it's important to have the ability to resolve issues that may occur. You can create solutions for clients to maintain financial health after problems occur with investments. Problem-solving skills are also useful for strategising your own career path to becoming a manager.

Adaptability

Being flexible helps one become more successful because the financial industry is subject to frequent changes. The market can change or clients may decide to alter the amount of funds they can invest, so it's important to adjust to these requests. Adaptability is a useful skill for professionals who work in teams and can make you a more agreeable team member.

Teamwork

In most financial firms, you work with a team of finance professionals to manage portfolios, track financial activity and make financial projections. The ability to collaborate and delegate tasks helps achieve the overall goals of the company. You can develop better teamwork skills by enhancing your interpersonal and communication abilities.

Read more: What Is Teamwork? (Plus Skills and Examples of Teamwork)

What is an average salary?

An average salary of a hedge fund analyst is $8,255 per month. Depending on your experience and education, you may earn more or less. For example, if you earn a master's degree, you can earn more because you have a high level of expertise. Similar roles, such as a fund accountant or fund manager may earn $64,056 per year or $98,892 per year respectively.

Related:

  • How Much Do Hedge Fund Managers Make and How to Become One?

  • How Much Does a Portfolio Manager Make? (With Tips)

What is the work environment?

Your work environment is indoors, often in an office setting. It's a full-time position with hours that are usually determined by the stock markets and when they are open. You spend most of the day on a computer sitting at a desk. Sometimes you have meetings with clients and often meet with your team of finance professionals. This is a very social career that's best for professionals with people skills.

Tips for finance professionals

Consider these tips to help become more successful in your role:

Build a network

A network is a group of professional contacts that you can use as a source to learn and grow in your career. You can make connections while earning your degree, interning and through work experience. These professionals may help find career opportunities based on where they work or who they know and can serve as references for applications.

Growing your network is beneficial and can lead to greater success. After you become a manager, you can continue to attend networking events or financial conferences so that you can meet professionals. This helps keep your industry knowledge current.

Learn to use technological tools

Technology plays a large role in the financial industry, so it's helpful to become familiar with technological tools. For example, you can learn to use programs to keep track of all financial activity and predict trends in the stock market. Technological solutions, such as cloud platforms, help store information and work from any location.

Study the strategy of successful investors

Studying the successful strategy of other investors or finance professionals can help inform your decisions. While you're advancing in your career, it's especially helpful to model your behaviours after other successful professionals. Being innovative can bring high rewards also, but using proven methods often helps repeat success which is preferable for clients.

Understand how to start a hedge fund

It's important to become familiar with the qualifications to start a hedge fund. You need three basic resources, which are:

  • Strategy: In order to attract investors, you need an effective hedging strategy.

  • Legal protections: A hedge fund attorney is essential to acquire so that you can work within regulations and create contracts with clients.

  • Funds: You need investors so that you have money to buy and sell stocks in the market.

Related: What Does an Investment Manager Do? And How To Become One

Please note that none of the companies mentioned in this article are affiliated with Indeed. Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.

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