Overview of getting a job at a hedge fund

094: Arbitrage Andy guide to hedge fund roles

Intro to Hedge Fund Jobs

Within the world of finance and Wall Street few jobs outside the realms of Private Equity or CEO roles are more coveted than hedge fund roles.

College kids, young professionals, and others dream of driving a fresh red Ferrari to Greenwich Connecticut to manage a $1B book before clocking out Friday to head to the Amalfi Coast for 2 weeks, donating to any organization of their choosing, and never having to worry about money again.

Perhaps it’s the average total comp of roughly $300K on the low end to $10,000,000+ (highly variable depending on total contribution/performance) for senior PMs or maybe it’s because everyone likes wearing vests like dollar bill stern and saying the F word.

It could be because Portfolio Managers with huge years are some of the most highly paid professionals in the entire world.

Regardless, hedge funds represent the unbridled capacity to make godly amounts of money and because of that getting a role at one is highly competitive, cutthroat, and arduous.

My goal is to shed some light on that process, what they look for, and what you can expect from the range of roles they have so you can have the best chance to get a role if that’s what you want.

I worked with hedge funds in my professional career, having to understand the ways they work internally, how they view the markets, and I also dealt with them when I was a trader.

I have strived to summarize and synthesize most components of the process of what hedge funds do, how to get a role, and the different strategies they leverage.

Others could be better suited to answering your specific questions on day to day operations, what specific funds do, and other insider details - so feel free to ask questions in the comments and I am sure folks in our following who work at Fortress, Citadel, Point72, 2Sigma, Millenium, and other large funds can help answer them.

We’ll break this guide and overview into several pieces.

• What is a hedge fund?

• Landscape Update

• How to get a job at a hedge fund

• Additional Resources to help you prepare

At the end I have compiled a list of resources that are extremely helpful if you’d like to study for a hedge fund interview, learn more about the industry, or see if you think a lateral move would interest you more than your current role. Several of these links are incredibly valuable for understanding the current status of the hedge fund industry in several hours.

The truth is, there are many different ways to break into work at a hedge fund but they all have one thing in common and that is a necessary passion for markets, finance, and driving alpha.

Colin Lancaster, at hedge fund Schonfeld Strategic Advisors, who’s written a novel on his time in the hedge fund industry, says the Holy Grail for all hedge funds is “finding an imbalance” and then profiting from it (EFC). Simple enough right?

There have been many changes in the hedge fund industry over the last 10 years and since the last financial crisis - hedge funds were once considered the rogue bad boys of the finance world, finding new and clever ways to profit in markets and avoiding much of the scrutiny that more traditional finance firms were subject to.

That has since changed and the industry now faces new challenges with regulation, public dissemination of information, stricter compliance protocols, increased redemptions, and demands for fee transparency.

However, they are still a fantastic place to start and nurture a career in finance not to mention one of the best places to make a shit ton of money.

Are you smart enough to find a differentiated viewpoint or angle that has been overlooked by most of the public and other investors?

Do you have an impressive resume and academic track record?

Can you identify undervalued companies and overlooked opportunities?

Do you have the ability to work under pressure, make tough decisions, and stand by your market thesis or asset play with conviction?

If so you could be a good candidate for a role at a hedge fund. Let’s walk through the basics and some background before diving into the usual ways people break into the industry and succeed there, often making exorbitant amounts of money in the process, or getting cut if they don’t.

We’ve aimed to put together a succinct but incredibly comprehensive snapshot of the best ways to get a hedge fund role, while understanding the landscape, and furthering your chances of a massive payday.

Let’s get it!