How to Start a Hedge Fund Career
Starting a hedge fund career can be difficult, so I have made an effort to provide lots of free hedge fund career resources to make this process easier. In the following video, I review some career advice and the basics of starting a career in the hedge fund industry.
Video Transcript/Summary: The strategies and tips provided within this video module include:
- Visit HedgeFundCertification.com to access a library of career resources.
- Access the 10 Steps to a Hedge Fund Career article via HedgeFundCertification.com
- Decide whether you really want to work at a hedge fund.
- Become a student of the hedge fund industry.
- Use the Three Circles Strategy.
- Identify Hedge Fund Career Mentors.
- Complete One or More Internships.
- Develop Your Unique Value Proposition.
- Hedge Fund Job Tips.
- Land The Unadvertised Hedge Fund Job.
- Consider Hedge Fund Service Provider Jobs.
- Apply To Hedge Fund Jobs.
Transcript for How to Start a Hedge Fund Career
Hello, my name is Richard Wilson and this short video is going to review some hedge fund career advice and job search advice. I’m the head of the Hedge Fund Group Networking Association. We offer a hedge fund training and certification program and I also write daily in hedgefundblogger.com.
So first of, let’s start with the very basics. If you’re completing a job search and you have work experience, you may know exactly what type of hedge fund position you’re aiming for and you might know what you want to do, what type of formula you want to work for. If you don’t already know that, before following the advice in this video I would recommend that you probably spend some time reading some books on hedge funds or even easier you could just simply go to hedgefundblogger.com and review the free videos, look at the free career articles, download our free eBook or you can go to hedgefundscareer.com and read about different types of hedge fund careers there as well.
I’d really encourage you to try to narrow it down exactly what type of career you would like and what type of goals you have during your job search before you go out applying for positions or you’ll get into a job interview and they’ll ask you why you’re applying for that position and you know your answer is not really going to resonate with them when they’re interviewing 20 different people. It becomes obvious who really wants the job and who has thought through the process of why they did like to work in that position.
Okay. Next, I’d like to just go through a process you can follow during your hedge fund career search. I know that this process works because it’s the process that I used to get into the industry several years ago. So let’s go to hedgefundcertification.com. Here is our hedge fund certification and training program website. On the top right-hand corner there’s a resources tab, go down to hedge career resources, click on that. This opens up our library of career resources. You’ll see several resources listed here. The first one is an article I wrote for investopedia.com last year on 10 Steps You Can Take to Manage Your Hedge Fund Career.
Let’s go there real quick. Okay. Now, skip down here. Number 1, we already covered this. Now make sure that you really do want to work for a hedge fund and try to figure out what part of the industry is going to make the most sense for your skill set, what you’re passionate about, what your education and past experience has been. It’s an important first step because it can help you focus your career search on a very small niche of the industry and can save you, you know potentially months of networking with the wrong people.
Down here, step number 2, become a student of the industry. Subscribe to 5 free newsletters on hedge funds, read 4 or 5 books on hedge funds, read articles about the area you’re most interested in, go to networking events. So really try to learn as much as you can about the industry, terms people use, strategies that hedge funds use for investments, what challenges the industry is facing. All those are going to help. Make sure that the industry is right for you but also it’s going to help you when you’re interviewing and help you work more efficiently once you’re on the job.
Step 3, down here is the Three-Circle Strategy. This is a business strategy put forward by Jim Collins and his book “Good to Great.” In his research he found that businesses who made consistent great decisions often considered 3 things when they’re looking to make a decision. They looked at what ideas would fit your passions or what you’re interested in doing. They looked at what ideas would be highly profitable and then they looked at what other ideas really would be a fit with your kind of DNA and what you’re naturally good at doing.
So when you’re looking at a hedge fund position, make sure that you’re not just going after position that pays the most money. Almost every position in the hedge fund industry pays very well after you gain some experience. So I really encourage you to figure out what would be the best match between your background but also your interest and you know where those 3 areas kind of combined for you in the industry.
All right. 4, identify some hedge fund career mentors while you’re mentoring or networking in the industry. Try to keep an eye out for people at networking events potentially service providers or consultants who are very well connected and very knowledgeable about the industry and see if they’d meet with you just once or twice for coffee. If you could send them an e-mail once a quarter for just a couple sentences of advice on what you should do next. It’s important not to overwhelm people who mentor you with 5-paragraph, long essays asking for advice and telling them your life story. Sometimes you can get through that quickly or a coffee but over e-mail just becomes an annoyance to most busy professionals.
So try to keep the advice very pointed and straight forward if you have a question, figure out exactly how you can word it concisely so that you can get the most value out of them while they don’t have to spend a whole lot of time with you because if they’re a valuable mentor then they’re usually very, very busy. Complete one or more internships. I definitely recommend looking to work for a fund as soon as possible even if it’s a hedge fund startup and you’re helping them just to complete market research, complete research on their competitors, put their information into online databases for them, anything you can do so that you can get available — so you can get familiar with how a fund works, how they normally operate, how their investment process works, how they manage risk in the portfolio, how they raise capital for the fund.
There’s a lot of things that you just kind of pick up by being around them that you don’t get if you’re just always searching for your dream job but never working within an internship. Develop unique value proposition. If you have a master’s degree or you’ve completed internships in the past and it’s very important to figure out what makes you really different from everybody else that’s applying for jobs, and everybody who goes to a firm is going to say that they want to be there long term, that they’re very hardworking, that they only want to work in this position. So you have to think of something really unique and that’s usually based on internship experience or insights you have on the industry. And the trick here is the sound unique and valuable without overselling yourself.
Many people are so desperate to get a job in the hedge fund industry. They might say that they’re an expert trader when they’ve only been trading for a year or two or that they can produce 30% returns forever. You know I’ve only been trading for a couple of years in a very small portfolio. So it’s important to balance and having something unique to offer and not overselling yourself because that will be obvious to most hedge fund employers.
Step 7, is some hedge fund job tips. There are certain things that employers will look for having passion and experience in marketing and sales can help if you’re looking for a capital raising role or if you’re working for a small hedge fund and you can be wearing many hats. Having heavy quantitative experience and modeling and just being familiar with all the terms and ratios that are often used in modeling and evaluating portfolios could be something highly useful. Many hedge fund employers look for highly educated professionals. It does not mean you have to go to ivy league institution. It just means that you put in the hard work to complete your bachelor’s degree or that you put in the extra work to complete your MBA or complete your JD. I think that means a lot to many employers because it shows you’re not flaky and you’re organized and you follow through on what you commit to.
Step 8, this is probably the most important step in the process. You should really consider unadvertised hedge fund jobs. Go and network with hedge funds, ask them for a job, ask if you can be fitted into the organization, ask if you can prove yourself. It is the most overlooked opportunity in the industry. Most people only look for jobs that are being advertised and I think that’s absolutely wrong approach. Every single job I’ve ever gotten was unadvertised and I landed it by being pro-active and proving myself as someone that was worth a lot to that organization.
Step 9, don’t rule out service providers. You can work for a service provider and gain some experience within trading, print brokerage, risk management, investment research or marketing in the sales and then with that experience you could go work inside of a hedge fund later or you could ask as a consultant or keep on working for a service provider in the industry.
And step 10, apply for the job. Often times you can kind of get into a paralysis mode or there’s information overload, you don’t know where to apply, you don’t think they would ever hire you. But be pro-active and apply for the positions you do see online and also apply for those, like I said, that were unadvertised.
So those are the main tips in this article for managing your hedge fund career search. It’s called 10 Steps to a Career in Hedge Funds. And again, if you want to access this just go to hedgefundcertification.com. Go up to hedge fund resources and then down the hedge fund career resources. And we’ll be adding more articles here and videos over the next two to three weeks so check back soon and we’ll have more content.
I hope that this guide has provided you with some concrete steps to launch your hedge fund career.
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