The temptation of hedge funds
If you happen to work in investment banking and don’t put in at least 90 hours a week, you’re not even in the game. Bankers understand this, and often become so entrenched in the long-hours culture that they find it difficult to escape into another venture. At hedge funds, meanwhile, the ‘reasonable’ working week is around 70 hours.
Around 80% of people working in hedge funds work between 50 and 70 hours a week, according to a recent report from consultants Benchmark Compensation. What’s more, only 17% of respondents to their survey describe this as a poor work-life balance, with 38% rating it as above average or excellent.
70 hours a week is not extreme, but nor does it make for an insignificant period of time in the office. Hedge fund professionals and recruiters never cite shorter hours than banking as a selling point for making the switch to the buy-side, but the culture means that you’re unlikely to be chained to your desk for the sake of it.
“Unlike banking, consulting and the law, hedge funds are not client-serving, professional service organizations. Hedge funds get paid on their results - the performance of the investments they make,” says Anthony Keizner, managing director of headhunters Glocap. "Thisstands in contrasttoa 'billable hour' set-up or trying to impress a client with the turnaround speed of a document, which often translates into working long hours into the night."
The quality of life in a hedge fund is more “exciting and entrepreneurial” than in an investment bank, adds Peter Elliott, CEO of hedge fund recruiters Elliott James. People don’t go into hedge funds expecting to be able to clock off early and spend time with the kids, they go to escape bureaucracy and chase the big pay packets.
“People are still expected to work long hours to achieve their performance and at the smaller hedge funds benefits are insignificant,” he says. “Essentially people are chasing the potential for greater compensation and the chance to work in a dynamic environment.”
Some hedge funds are not averse to indulging in casual invasion into their employees’ personal time for the sake of it. Steve Cohen allegedly ran a four-hour conference call for SAC Capital’s portfolio managers and analysts on Sunday evening to “ascertain their best trading ideas”.
What’s more, it’s not uncommon for hedge funds to cover, say, Asian markets from the U.S., which can make for unsociable hours. "Not all hedge funds are created equally, and the lifestyle at some is very challenging. Particularly for those that trade on foreign markets, they often demand their people work long and unconventional hours,” says Keizner. “At other funds, Sunday meetings to discuss their positions and the trades for the week are a regular occurrence."
Hedge fund managers shouldn’t be afraid of burning the midnight oil – Greg Coffey, the famous ‘star’ hedge fund manager worked through the night, even when on holiday with his family. He retired at 41 with an estimated fortune of $665m.
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FAQs
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.
How stressful is being a hedge fund manager? ›
It's not a 9 to 5 job at funds where you are investing with a short time horizon (think 1 to 6 months), like most of the multi-managers. The pressure to perform can be very overwhelming and will cause you to lose sleep and for many burn out over time.
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.
What is the lifestyle of a hedge fund manager? ›
The day for hedge fund managers is very long and full of stressful hours. The end of the market day doesn't necessarily mean that they are done for the day. Many hedge fund managers run positions in overnight markets so they will need to monitor those trades, often late into the night.
Is portfolio manager a stressful job? ›
Long hours, intense competition, divorce, stress, and even substance abuse – these are some of the issues that can typically affect portfolio managers.
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 working at a hedge fund prestigious? ›
They are considered the most prestigious jobs, pay the most, and offer the highest advancement potential and the best career opportunities. At some funds, there are additional roles – for example, at quant hedge funds, there are also quants and programmers with math/statistics/computer science backgrounds.
Is it hard to get hired by a hedge fund? ›
Hedge funds employ some of the best-paid business professionals anywhere, but landing your first job in the industry is no cakewalk. Building a hedge fund career takes determination, networking stamina, and a fierce competitive streak. Here are some steps to help get you to that interview and then land that job.
What degree do most hedge fund managers have? ›
Hedge fund managers often have a master's degree or even a Ph. D. in finance, mathematics, economics, financial engineering, quantitative finance, programming, marketing, or business administration. Others have advanced degrees in a specialty such as engineering or accounting.
Who is the richest hedge fund manager? ›
Who Is the Richest Hedge Fund Manager? Ken Griffin of Citadel is both the richest hedge fund manager and the highest paid. In 2022, he earned $41. billion, and by the beginning of 2023 his net worth was estimated at $35 billion.
Skills and qualities of a good hedge fund manager:
Critical thinking. Analytical skills. Decision-making. Multitasking.
What is a hedge fund manager's salary? ›
₹13L - ₹14L/yr. 1 salary. The average salary for Hedge Fund Manager is ₹17,40,012 per year in the India. The average additional cash compensation for a Hedge Fund Manager in the India is ₹3,99,624, with a range from ₹3,85,548 - ₹4,13,700.
How old is the average hedge fund manager? ›
They found that the median age of a hedge fund manager is 48.
What are the cons of working at a hedge fund? ›
Hedge fund work is more specialized than private equity or investment banking, so you have less mobility. The hours don't necessarily change much at each level, and in some ways, PMs have the most stressful jobs of anyone.
Is a hedge fund manager a hard job? ›
On average, the top hedge fund managers usually work around 40 hours a week. This is a hectic job profile that needs constant monitoring and active engagement. The highest-paid hedge fund managers can even put up to 70 hours a week.
Do hedge fund managers work on weekends? ›
Working on the weekend is not common but it certainly does happen from time to time. Though working at a hedge fund is not a typical 9 to 5 job, it is less strenuous than investment banking analyst or private equity jobs.
How many hours a week does a portfolio manager work? ›
Many PMs work around 60 hours per week (or more), but they're “on call” all the time because the markets are always moving, and potential crises are always waiting.
How hard do hedge fund managers work? ›
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.
