- Business Insider
Hedge funds are having a rough time.
At the same time, the industry is known for being lucrative, turning a fortunate few into multi-millionaires – and even billionaires.
Not that it’s easy to find a job.
We asked a handful of hedge fund recruiters what it takes to find an investment role these days. Some common themes came up:
- There’s a strong demand for analysts with quant backgrounds, which should come as little surprise – funds are incorporating alternative data into their strategies and trying to figure out how to outsmart the competition. Analysts need to be flexible, meaning they need to learn new skills or be willing to start at a small, start-up fund with less pay, since a lot of the bigger funds aren’t hiring.
You can read the recruiters’ advice in full below.
Graham Smith, partner at Options Group
- Reidar Hahn/Fermilab
“The biggest trend right now is for hedge funds to be looking for talented quants of all levels to support their business. Gone are the times when it’s only the high frequency and systematic firms looking at hiring talented quants. We are seeing hedge funds of all strategies realize the value of big data and statistical analysis.
What’s your advice for job seekers?
“Have a STEM (science, technology, engineering, math) degree from a top university, read up on topics/subjects beyond your core field of study, and be flexible as you may need to re-skill when you join a fund.”
Richard Risch, CEO of the Risch Group
“The biggest trend today is how the industry is being reshaped as a result of poor performance industry wide. The big guys are seeing redemptions at a record rate, so hiring in that sector is non-existent or extremely limited. Today I would (and do) tell candidates looking in the hedge fund space to focus on the emerging manager segment. It is also the only segment of the industry we are seeing search work from today.
“Base pay is always lower at emerging managers, but could very well include equity. In one case a few years ago, an emerging manager took off, was sold and a couple of people received an eight-figure payout. As far as strategy, it seems the only ones consistently receiving net new institutional flows are systematic equity market neutral funds.”
Adam Kahn, managing partner at Odyssey Search Partners
- COD Newsroom/Flickr
“Right now, the biggest trend in the hiring market is that the larger, more stable firms are really using this environment to pick off top-tier talent. Many of the larger multi-manager firms have been on a yearlong hiring spree. We don’t see them slowing down anytime soon.
“As for strategies, there seems to be much more demand in fixed income versus equity strategies.”
What’s your advice for job seekers?
“Level your expectations. Candidates should not expect guarantees or repayment of deferred comp. This is a buyers’ market and if you decide you want to take a look at other opportunities, you need to understand that.”
Michael Goodman, managing partner at Long Ridge Partners
- Thomson Reuters
“If you were asking me what we’re gearing up for the next two to three years, I truly believe it’s [analysts] with a much more quantitative background. Some of it’s at the PhD level, or a background in math, physics, engineering, computer science.
“There are firms that are still going to take analysts that are not quantitatively oriented, but I see a shift in that direction. The industry is becoming much more model driven than stock-picking driven.”
David McCormack, CEO at DMC Partners
- Leo Leung/Flickr
“Everyone is talking about data. Data, data, data – it’s all we hear about … My view on this, if you look at performance this year, redemptions on the global long-short equity side have been huge and the quant funds seem to be doing well.
“So the quant funds are inevitably going to say that’s the right strategy. But then that strategy gets duplicated 50 different times by 50 different funds versus the human capital side which is, can people analyze the data and have better performance over quants? It’s a theme. I don’t think anyone has got it right.”
“I’m not for or against – I think there’s a healthy mix … I’m not sure where we come out at the end of the day.
“We’re looking for the best portfolio managers in the market. I think there’s a healthy demand for both.”