What is a Hedge Fund Manager?

Recently there has been a shift out of traditional investment houses into more specialist funds, such as hedge funds, quantitative funds and emerging markets funds.

A hedge fund is an investment fund open to a limited range of investors that undertakes a wider range of investment and trading activities than pension / insurance funds. Every hedge fund has its own investment strategy that determines the type of investments and the methods of investment it undertakes. Hedge funds, as a class, invest in a broad range of investments including shares, debt and commodities.

As the name implies, hedge funds often seek to hedge some of the risks inherent in their investments using a variety of methods, most notably short selling and derivatives.

Hedge funds are typically open only to a limited range of professional or wealthy investors. This provides them with an exemption in many jurisdictions from regulations governing short selling, derivatives, leverage, fee structures and the liquidity of interests in the fund.

If I work as a Hedge Fund Manager What will I be doing?

Hedge fund managers employ many different trading strategies, which are classified in many different ways, with no standard system used. A hedge fund will typically commit itself to a particular strategy, particular investment types and leverage limits.

Each strategy can be said to be built from a number of different elements:

• Style: Global Macro, directional, event-driven, arbitrage, managed futures (CTA)
• Market: equity, fixed income, commodity, currency
• Instrument: long/short, futures, options, swaps
• Exposure: directional, market neutral
• Sector: emerging market, technology, healthcare etc.
• Method: discretionary/qualitative (where the individual investments are selected by managers), systematic/quantitative (or “quant” – where the investments are selected according to numerical methods using a computerized system)
• Diversification: multi-manager, multi-strategy, multi-fund, multi-market

If you work for a smaller company, which most hedge funds are, you might be wining and dining potential and existing clients, meeting investment consultants and playing a role in developing new products. In fact you will probably be involved in everything.

How do I get a graduate scheme / internship / entry level job or career in Hedge Fund Management?

Obtaining a graduate scheme, internship or entry level role in hedge fund management can be very challenging and competitive – though very achievable by getting your application, CV, interview and general approach right. You can guarantee that ninety percent of applicants for hedge fund managementg roles will not know how to apply, so getting your application in the top ten percent makes things a lot more achievable.

Approaching the company in the right way will make all the difference. Combining the right approach with a strong interview (and in some cases assessment centre) writ a strong focused tailored CV will go a long way. Make sure you have gone through the free videos on this sight by entering your name and email address in the top right of this screen underneath the video. Once you have filled this in you will have instant access to everything you need to secure your career in hedge fund management.

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