How to Have a Successful Career in Hedge Funds
Hedge fund traders and managers are well compensated for their work, which is ultimately why it’s such a cutthroat and competitive market. Nowadays, it’s no longer enough to have a four-year degree. It takes experience and connections to get into the field, and much more than that to stay in it. Here are five tips to build a career in a hedge fund.
Find a Mentor
Having a mentor is invaluable to hedge fund careers, or any career for that matter. Mentors can show you the ropes firsthand based on their field experience. They can give you actual pointers on:
- what to do and what not to do
- industry practices unbeknownst to the public
- other advanced tactics that you can’t learn from reading a textbook
Mentors are how people like Warren Buffett achieved phenomenal success. Buffett was mentored by the late father of value investing, Benjamin Graham.
Stray From the Herd
Hedge funds spot traders who are unique. They’ll headhunt you if you post good numbers and showcase a different style of trading. Work on how you’ll catch prospective employers’ attention. This can be through specialized knowledge of a particular market or financial instrument by interning for different investment firms and banks. It can be done by analyzing the markets and publishing your trade ideas in great depth.
Find Unadvertised Job Openings
Most hedge funds advertise their jobs online and through other channels, such as newspaper publications. You’ll also find a lot of good job openings unadvertised. Some clever ways to find unadvertised job openings include asking around your circle of:
- friends
- relatives
- coworkers
- through social networking sites
Facebook and LinkedIn are especially popular sites where hedge fund managers and traders post career-related news and updates.
Get Promoted From Within
Another way to snag one of those prized hedge fund careers is by working as:
- a consultant
- data analyst
- other finance-related position
If you find an opening for any of these hedge fund positions, take it and work with the company for a few months. Once you’ve had enough experience, you can try to apply as a hedge fund trader. Of course, you may need to update your credentials and secure special licenses to trade for the investment bank or hedge fund.
Network With Recruiters
Network with third-party recruitment agencies who recruit for hedge funds. Recruiters are often hired by large investment firms to headhunt traders and other non-investment positions. Bars and pubs in the heart of the city are often popular watering holes for investment professionals including recruiters. It may be worthwhile visiting these establishments for some networking.
Conclusion
Careers in a hedge fund are scarce, and for good reason. The average salary for entry-level traders at a mid-sized hedge fund is around $300,000, according to a 2013 industry report. This, however, doesn’t come without obstacles. You’ll be competing with a lot of applicants who have the same, if not better, credentials. Use the five tips above to separate yourself from the herd and get a high-paying trading job.
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