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.
Requirements include taking the Series 7, 65 or 66 certification exams. Chartered Financial Analyst (CFA): Aspiring hedge fund managers may work toward the CFA certification if they hold at least a bachelor's degree, complete four years of related work experience and pass three financial exams.
What are the minimum requirements for a hedge fund? ›
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.
Who are the richest hedge fund managers? ›
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.
Can hedge fund managers make millions? ›
The money is a big draw as well: if you're at the right fund and you perform well, you can earn into the mid-six-figures, up to $1 million+, even as a junior-level employee. The top individual Portfolio Managers can earn hundreds of millions or billions each year.
Do you need an MBA to be a hedge fund manager? ›
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.
Do hedge fund managers need a license? ›
Licenses for Hedge Fund Managers
Registered Investment Advisors (RIA) are generally required to complete the Series 66, 7 and/or 6 licensing programs with the Financial Industry Regulatory Authority (FINRA).
Do you need a CFA to start a hedge fund? ›
Of course you can start a hedge fund without a CFA or any finance designation.
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? ›
Hedge Fund Structures. US taxable investors prefer entities that are pass though entities for US income tax purposes. These include limited partnerships (LP) or limited liability companies (LLC).
Can a normal person start a hedge fund? ›
Can I start my own hedge fund? Most likely (provided you're not a convicted felon, recently filed for bankruptcy, have a judgment against you for fraud, or several other similar categories that would legally prevent you from doing so).
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 hedge funds hire out of college? ›
While working in equity research or in investment banking is typically the clearest path to working at a hedge fund, it is not impossible to start working at a hedge fund right after undergrad. It will however, take a great deal of work to overcome to highly competitive nature of recruiting.
Do hedge funds pay well? ›
Hedge funds are widely regarded as offering significant earning potential. Junior level employees are able to achieve salaries upwards of $500k in some places, and the best fund managers can see their net worth ultimately reach nine or even ten figures.
What is the legal entity structure of a hedge fund? ›
A typical hedge fund structure includes one entity formed as a partnership for U.S. tax purposes that acts as the Investment Manager (IM). Another entity functions as the General Partner (GP) of the Master Fund.
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.
Is a hedge fund regulated? ›
Hedge fund strategies involve investing in debt and equity securities, commodities, currencies, derivatives, and real estate. Hedge funds are loosely regulated by the SEC and earn money from the 2% management fee and 20% performance fee structure. U.S. Securities and Exchange Commission.
