How to become a hedge fund manager

Is becoming a hedge fund manager right for me?

The first step to choosing a career is to make sure you are actually willing to commit to pursuing the career. You don’t want to waste your time doing something you don’t want to do. If you’re new here, you should read about:

Overview
What do hedge fund managers do?

Still unsure if becoming a hedge fund manager is the right career path? to find out if this career is right for you. Perhaps you are well-suited to become a hedge fund manager or another similar career!

Described by our users as being “shockingly accurate”, you might discover careers you haven’t thought of before.

How to become a Hedge Fund Manager

Becoming a hedge fund manager typically requires a combination of education, experience, and professional certifications. Here is a snapshot of the pathway to the career:

Bachelor’s Degree
Hedge fund managers typically hold a Bachelor's Degree in Finance, Accounting, Economics, or a related field, such as business administration or international business.

Some hedge fund managers may hold a degree in a field such as engineering or mathematics, or computer science, especially if they specialize in quantitative analysis and financial engineering.

Work Experience
Hedge fund managers typically have several years of relevant work experience in the financial services industry, in roles such as financial analyst, stock trader, or another related role, before transitioning to hedge fund management. This allows them to develop strong skills in data analysis, quantitative analysis, and financial modeling, all of which are essential in the hedge fund environment.

Professional Organizations and Certifications
As the field of finance and asset management is constantly evolving, it is important to stay up to date with the latest technologies, industry developments, and best practices. Several industry organizations provide advocacy efforts, access to professional events, continuing education opportunities, and industry research and resources, as well as a network of like-minded professionals working in the field.

Many hedge fund managers hold professional certifications offered by these organizations, which demonstrate expertise in investment analysis and management, as well as a commitment to ongoing education and professional development. While they are voluntary, some companies may stipulate one or more of these certifications, described below, as a condition of employment, particularly in more senior roles.

  • Certified Hedge Fund Professional (CHP) – The CHP certification is offered by the Hedge Fund Group (HFG) and covers a range of topics related to hedge fund management, including portfolio management, risk management, and regulatory compliance.
  • Chartered Financial Analyst (CFA) – Offered by the CFA Institute, the CFA designation is a globally recognized certification program for investment professionals. It requires passing three levels of exams covering topics such as ethics, investment tools, portfolio management, and economics, and requires several years of work experience in investment management.
  • Certified Investment Management Analyst (CIMA) – The CIMA designation is offered by the Investment Management Consultants Association (IMCA). It requires passing an exam covering topics such as asset allocation, risk management, and investment strategies, as well as meeting other requirements such as work experience and education.
  • Chartered Alternative Investment Analyst (CAIA) – Offered by the Alternative Investment Management Association (AIMA), the CAIA designation is designed for professionals who specialize in alternative investments such as private equity, hedge funds, and real estate. It requires passing two levels of exams covering topics such as asset allocation, risk management, and alternative investment strategies.
  • Financial Risk Manager (FRM) – The FRM certification is awarded by the Global Association of Risk Professionals (GARP) and demonstrates expertise in risk management, including financial risk assessment, quantitative analysis, and risk mitigation strategies. The program consists of two levels of exams and requires candidates to have at least two years of relevant work experience.
  • Certified Private Equity Professional (CPEP) – Offered by the US Private Equity Council, the CPEP designation is a specialized certification focused on private equity. The program covers a range of topics related to private equity investing, including fundraising, deal sourcing, and portfolio management.
  • Investment Advisor Certified Compliance Professional (IACCP) – The IACCP designation is a professional certification for compliance professionals who work in the investment management industry. It requires completing a program of study and passing an exam covering compliance regulations, procedures, and best practices.

The Hedge Fund Association (HFA), the Managed Funds Association (MFA), and the International Association of Financial Engineers (IAFE) also support hedge fund management professionals.

Networking
Building a network of contacts within the finance industry can be helpful when seeking employment as a hedge fund manager. This could involve attending industry events, joining professional organizations, and/or seeking out mentorship opportunities.

Advanced Education
While not always required, some employers may prefer candidates with a Master’s Degree or Ph.D. in Business Administration, International Business, Finance or Economics. These advanced programs provide a deeper understanding of the business, financial, and economic landscapes, as well as investment principles, and can be especially helpful for job seekers who want to specialize in a particular area of hedge funds, such as global funds or sector funds.