A Day in the Life of a Hedge Fund Manager (2024)

The average workday for a hedge fund manager begins early and usually runs late. Hedge fund managing is rarely, if ever, a 40-hour-a-week job, however being on the ball and diligent can lead to a handsome salary and a rewarding, high-intensity career.

Key Takeaways

  • Being a hedge fund manager is a highly-paid job, but also calls for long hours of intensive work.
  • Work days do tend to follow somewhat of a routine, with market open and close being the most critical.
  • In addition to trading, hedge fund managers must also make sure all of their positions are in order, their models up-to-date, and their business/social lives active to keep investors and brokers happy.

Hedge Fund Manager Duties

A hedge fund manager is in charge of making investment decisions for a pool of capital commonly provided by investors that meet designated requirements for net worth or investment sophistication. The best hedge fund managers hold degrees in higher education, specialized licensing, and credentialing.

Since a hedge fund manager is responsible for handling a portfolio of investments, their position is somewhat similar to that of a mutual fund or exchange-traded fund (ETF) manager.

However, because hedge funds are typically much higher-risk portfolios that are more actively traded, they require close monitoring and a greater amount of day-to-day hands-on management and decision-making regarding investments. The hedge fund manager is the person ultimately responsible for conducting the hedge fund's everyday affairs, such as raising investment capital and rebalancing investments to maintain a given risk/reward ratio. They are usually supported by a team of analysts and traders who conduct much of the necessary research and are in charge of actual trade execution.

A typical day in the life of a hedge fund manager usually involves constant market monitoring and investment evaluation, along with research and sales work.

Early Morning: Reviews and Meetings Before Markets Open

4 a.m. – Roll over and turn on your laptop computer to watch some of the early morning London trading. As it looks like the financial world is not in complete collapse, it's safe to go back to sleep for an hour.

6 a.m. - Commute to work with breakfast on the go. If you live in the city, public transit might be your best bet, otherwise you may get stuck in morning traffic jams.

7 a.m. – At work before the opening of the New York markets, you spend the time reviewing the fund's current positions by looking at the previous day's report from your prime broker and considering orders to place for the day. After that, you meet with your staff to consider and discuss new trading opportunities and evaluate existing open positions. You spend the rest of your time poring over financial news from a variety of sources, such as business channels and online news feeds.

Late Morning: Monitoring Markets, Adjusting Trades and Considering Opportunities

8 a.m. – As the U.S. markets begin to open, you watch the action unfold to see if anything happening could significantly impact current holdings or open orders for potential new positions. You may have heard rumors about a possible upcoming merger and make some phone calls to contacts to get more solid facts and additional information. At 9:30, you have an interview scheduled for an analyst position. The interview is interrupted more than once by traders apprising you of arbitrage opportunities or asking if, based on current market action, you want to change price levels on any open orders.

9 a.m. - After the commotion of the open has calmed down, you may catch up on some phone calls and emails pertaining to work. If you're hiring, now may be a good time to schedule job interviews or meet candidates.

10 a.m. – You continue monitoring market action while reading through the filing papers for a proposed merger by a company in which the fund is heavily invested. Traders continue to pop into your office to run trading opportunities by you. More often than not, you instruct them to use their best judgment, although you might suggest specific parameters under which to make a given trade. You may, perhaps, get a call from a salesperson regarding an initial public offering (IPO) or secondary offering that may interest you.

A Working Lunch

Noon - Lunch is at an upscale restaurant, even if you're not really that hungry, because you're meeting with either a corporate chief executive officer (CEO), a potential investor, or a fellow fund manager from whom you want to get investment ideas or opinions.

Afternoon: Sales Work and Reviews

1:30 p.m. – You check all of your market positions immediately upon returning to the office, even though you checked them on your smartphone at least once or twice during lunch. Traders have more questions for you, and you have a scheduled meeting with an equity analyst to discuss taking a position in a tech company.

The afternoon is prime time for making sales calls to potential investors. They typically have questions regarding your investment strategy, risk/return management and the structure of the firm.

News that a company you have a large position in is being investigated by the U.S. Securities and Exchange Commission (SEC) sends the stock tumbling and requires an emergency staff meeting to decide whether to dump the position at a loss or try to weather the storm.

3:15 p.m. - One of the companies that you are tracking is holding an analysts call now. You hop on the conference call and let it run on your squawk box. While there may not be much new information gleaned, staying up to date is always important and you might pick up on some nuance or clue that others might miss.

4 p.m. – As the U.S. financial markets close, it's time for an end-of-day meeting to review the status of the fund's portfolio holdings and hear ideas from researchers, analysts or traders regarding potential opportunities for the next trading day.

4:30 p.m - The day at the office winds down with you reading SEC filings, trade publications, and research reports. This can take an hour or more to compile all the end-of day paperwork and accounting tasks.

6:30 p.m. - Drinks with your colleagues, paid for by one of your prime brokers. They meet you at the bar to discuss markets, investment strategy, and the weather.

8 p.m. - Because it's Friday, you can go two whole days without checking price quotes before markets begin to reopen. However, dinner with a prospective fund investor means the workday isn't done just yet.

A Day in the Life of a Hedge Fund Manager (2024)

FAQs

What do hedge fund managers do all day? ›

In terms of everyday responsibilities, the main duties of a fund manager include building financial models, meeting with clients, and analysing investments. At a higher level, they oversee the hedge fund's daily operations. This might include risk management, marketing, sales, and cash flow forecasting.

Is a hedge fund manager a stressful job? ›

Long and stressful days

If they work for a large global hedge fund, they will also need to speak with colleagues, subordinates, or managers in other time zones, as well as attend investment committee conference calls.

What do hedge funds do day to day? ›

A typical day in the life of a hedge fund manager usually involves constant market monitoring and investment evaluation, along with research and sales work.

How many hours a week do hedge fund managers work? ›

Hedge Fund Analyst Hours and Lifestyle

At smaller, single-manager funds, the average might be 10-12 hours per day, for a total of 50-60 hours per week (weekend work is rare). As you move to larger, multi-manager funds, the hours and stress get worse, so the average may be more like 60-70 hours per week.

Why are hedge fund managers so rich? ›

Hedge fund managers typically earn above-average compensation, often from a two-and-twenty fee structure. Hedge fund managers typically specialize in a particular investment strategy that they then use to power their fund portfolio's mandate for profits.

Is it risky to be a hedge fund manager? ›

Risk: All else being equal, hedge funds are probably riskier because they do not control the assets they trade, and it's very difficult to beat, or even match, the performance of the public markets.

How much does a PM at a hedge fund make? ›

Pay at this level depends almost 100% on performance, which means that PMs could make a few hundred thousand USD… up to $1 million or even $10 million+. On average, though, a PM at a mid-sized fund that performs decently might earn between $500K and $3 million.

What is the highest paying job in a hedge fund? ›

What are Top 5 Best Paying Related Hedge Fund Jobs in the U.S.
Job TitleAnnual SalaryMonthly Pay
Hedge Fund Attorney$175,207$14,600
Cfo Hedge Fund$157,532$13,127
Private Equity Fund Controller$154,999$12,916
Hedge Fund General Counsel$151,643$12,636
1 more row

Do hedge funds have good work-life balance? ›

Compared to all the other types of finance careers, work life balance at hedge funds is usually better than investment banking or private equity in the sense that your hours won't be as volatile. It is very unlikely that you will stay up late working past midnight at a hedge fund.

Is it hard to get into hedge funds? ›

If you want a hedge fund job, you'll typically need to have an excellent academic record and – if you want to be an analyst or a portfolio manager – you'll need to be no stranger to very hard work. “The game has gotten much harder,” says Colin Lancaster.

What is the average lifespan of a hedge fund? ›

As a quantitative researcher who previously worked in the hedge fund industry, Farnsworth has been studying hedge funds for quite some time. Over the years, he noticed that the average lifespan of a hedge fund is quite short – less than five years.

What is the average age of a hedge fund manager? ›

The average age of hedge fund managers is 40+ years years old, representing 71% of the hedge fund manager population.

Can hedge fund managers make millions? ›

The most successful hedge fund managers handle billions of dollars in assets for their clients, and their earnings can reach into the billions as well.

How many hours do hedge fund managers sleep? ›

Peter Brown, the CEO of top hedge fund Renaissance Technologies, slept 2,000 nights in his office. In an interview with Goldman Sachs, he said he valued the uninterrupted time with his colleagues. "The job is so demanding, I really don't see how I could do it otherwise."

What do most hedge fund managers major in? ›

What education is required to become a hedge fund manager? Many hedge fund employers require employees to receive a bachelor's degree in finance or a related specialty like accounting or economics. Some hiring managers may require a master's in business administration as well.

How many hours do hedge fund managers make? ›

At smaller, single-manager funds, the average might be 10-12 hours per day, for a total of 50-60 hours per week (weekend work is rare). As you move to larger, multi-manager funds, the hours and stress get worse, so the average may be more like 60-70 hours per week.

How many hours do you work at a hedge fund? ›

On average, hedge fund traders often work long hours, ranging from 50 to 80 hours per week. The specific workload can depend on the fund's strategy, market conditions, and individual firm policies. During peak periods or when significant market events occur, traders may put in even longer hours.

How many hours do hedge funds work? ›

Hedge fund analysts typically work between 60 and 70 hours a week. Working on the weekend is not common but it certainly does happen from time to time.

What does a portfolio manager do all day? ›

A portfolio manager directs all of the trades the investment fund or portfolio makes during the day by making final decisions on the securities involved. They also meet with analysts who have conducted research on various securities and the institutions that issued them.

References

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