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How to Become a Hedge Fund Manager

Charlie S
Hedge fund managers are one of the most in-demand professionals in the financial services industry. Read on to know what it needs to become one.
A career as a hedge fund manager is highly coveted in today's world of finance. These finance executives manage millions of dollars of high net worth clients, and invest the amount in the right instruments.
Hedge funds are institutions which are not regulated by the SEC, and they are open to a few investors. The strategy is decided on the number of investors and the total amount of money involved. Managing a hedge fund is not an easy task, and one needs to have the right educational qualifications and aptitude to emerge as a successful hedge fund manager.

Educational Requirements

  • Hedge fund managers mostly have college degrees in the fields of accounting, economics, mathematics, or finance.
  • Degrees from ordinary schools won't land you the best job around. For this job, you need to pass out from premier management institutions.
  • Most have a Masters in Business Administration (MBA) with a specialization in finance.
  • A doctorate in the field of accounting/finance can also be useful.
  • High level of education assures clients that their money is in safe hands, and the chances of making decent profits are huge.

Importance of Experience

Gaining suitable experience is one of the most vital steps to a career in hedge funds. You can't expect to get the topmost post in a reputed hedge fund after working for a few years. Initially, you will have to start off your career as a financial analyst/business analyst, and understand the working of the company in detail.
After this, you should work for senior level positions, such as a finance executive, finance director, or chief financial office, before you get to lead the transactions of the organization. Internships in large hedge funds can help a lot to get the much-needed practical exposure.

Salary Range

  • Salaries depend on the client whose portfolio one has to manage. Income will be very high for those managing portfolios of huge corporations and wealthy individuals.
  • Successful managers in the US can make about a million dollars per year.
  • Though these salaries are not earned by everyone, this job will certainly pay you more than other finance jobs.
  • Income largely depends on the commission one gets to manage the fund. This can range between one to two percent of the total amount invested.
  • Performance-based fees are also a salient feature of the salary. More the profits generated by the fund, more will be the incentives for these talented professionals.
If you find this career interesting, you should start your preparations from high school itself, as the competition is extremely fierce.