High School
You’ll need to earn stellar grades in high school in order to be accepted to a top-tier college—the starting point for the majority of hedge fund managers. In high school, take classes in economics, business, finance, accounting, statistics, computer science, English, speech, psychology, foreign language, and social studies.
Postsecondary Education
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.
According to an eFinancialCareers.com analysis of its curriculum vita database, the following U.S. colleges are the most popular for hedge fund professionals: Columbia University, New York University, University of Pennsylvania, Cornell University, University of California, Harvard University, University of Chicago, Carnegie Mellon University, University of Michigan, Princeton University, and Yale University.
Certification
Hedge fund managers, especially those at small firms that don’t have a large support staff, might choose to earn certificates in compliance, investor relations, and risk management to diversify their skill sets. These certificates are offered by colleges and universities and professional associations. For example,Seneca College offers a certificate in investor relations. The University of California-Irvine and the Institute of Risk Management provide certificates in risk management. And the University of South Florida offers undergraduate and graduate certificates in compliance.
The Chartered Alternative Investment Analyst Associationoffers the Fundamentals of Alternative Investments Certificate Program. In this online, self-paced course, you’ll learn about traditional vs. alternative investments, hedge funds, investment returns and risks, due diligence, risk management, and other topics. Visit https://caia.org/programs/fundamentalsfor more information.
Other Education or Training
Many associations provide professional development opportunities to hedge fund professionals that focus on investment strategies, accounting and auditing practices, compliance and regulatory issues, risk management practices, and U.S. and international financial markets. These organizations include the New York Alternative Investment Roundtable, CFA Institute, International Association for Quantitative Finance,Investments and Wealth Institute, and CFA Society New York.
FAQs
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.
What are the legal requirements to be a hedge fund manager? ›
Licensing Requirements for Hedge Fund Managers
- The only universal license requirement for a hedge fund manager is an ordinary business license. ...
- Some states require official registration as an investment advisor and payment of a licensing fee, but most states require the Series 65 license.
Regulation D
It is not uncommon for a hedge fund to require at least $100,000 or even as much as $1 million to participate. Unlike mutual funds, hedge funds avoid many of the regulations and requirements within the Securities Act of 1933.
What is required to work at a hedge fund? ›
When preparing for a career in a hedge fund, consider earning your bachelor's degree in math, accounting, finance, investment banking, economics or business. You can also benefit from taking courses in financial math, global investment strategy, emerging markets, psychology and consumer behavior.
What certifications do you need to be a fund manager? ›
Obtain Professional Certifications: Investment fund managers may be required to obtain certain professional certifications, such as the Chartered Financial Analyst (CFA) designation or the Certified Investment Management Analyst (CIMA) certification.
Can anyone be a hedge fund manager? ›
A hedge fund manager is a financial adviser who oversees investment accounts, leverages advanced financial software and raises expenditure capital. You can become a hedge fund manager by obtaining at least a bachelor's degree, earning CFA certification and gaining experience in the finance industry.
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.
What is the 2 20 rule for hedge funds? ›
The 2 and 20 is a hedge fund compensation structure consisting of a management fee and a performance fee. 2% represents a management fee which is applied to the total assets under management. A 20% performance fee is charged on the profits that the hedge fund generates, beyond a specified minimum threshold.
Can a hedge fund be an LLC? ›
The hedge fund is typically set up as either a limited partnership (LP) or limited liability corporation (LLC). In comparison, a general investment manager can set up any type of business structure that meets the needs of the investment manager.
Can a normal person start a hedge fund? ›
No, an individual cannot open up their own hedge fund and manage other people's money without starting a company. In the United States, a hedge fund is a type of investment fund that is typically open only to accredited investors.
With a little bit of capital, it is relatively easy to start a hedge fund. However, implementing risk controls, growing assets, hiring staff, and running the organization as a profitable business while producing positive performance is very challenging.
How many hours do hedge fund managers 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.
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.
Do you need a CFA to work at a hedge fund? ›
And the funds that do hire post-MBA often want to see pre-MBA buy-side experience, such as in private equity, asset management, or hedge funds. The CFA is a bit more helpful, particularly if you're a career changer or you need to demonstrate your knowledge in the absence of traditional finance experience.
Can a CFA become a hedge fund manager? ›
Many hedge fund managers have their CFA, but there is a great deal of work involved in the middle. And your CFA could lead you in hundreds of destinations, only one of which would be hedge fund manager. CFA is not an absolute requirement, but it certainly helps.
Can an MBA become a fund manager? ›
To become a fund manager, you typically need a bachelor's degree in finance, economics, accounting, or a related field. Some employers may prefer candidates with a master's degree, such as a Master of Business Administration (MBA) or a Master of Finance (MFin).
Do hedge funds need to be registered? ›
Hedge funds are typically required to register with the SEC if they maintain investor assets of more than $100 million.
What certifications do I need to start a hedge fund? ›
Hedge Fund Certifications
- Registered Investment Advisor (RIA) ...
- Certificate in Hedge Fund Regulation (CHFR) ...
- Chartered Financial Analyst (CFA) ...
- Chartered Investment Counselor (CIC) ...
- Chartered Alternative Investment Analyst (CAIA) ...
- Certified Investment Management Analyst (CIMA) ...
- Certified Private Wealth Advisor (CPWA)
Are Hedge Funds Legal? Yes, they are legal. That is, if they are doing the right thing. The usual problems that present are insider trading and market manipulation.
Is a hedge fund regulated? ›
Hedge funds are subject to the same trading reporting and record-keeping requirements as other investors in publicly traded securities. They are also subject to a number of additional restrictions and regulations, including a limit on the number and type of investors that each fund may have.
