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Last Updated On 25 Jun, 2020
Hedge Funds are an alternative form of investment in which a group of investors collect money and invest in a financial partnership. Hedge funds are considered to be a good way of minimizing risk when investing. A Hedge Fund Manager is a person of financial expertise who is put in charge of managing these collective investments on behalf of the investors.
A hedge fund manager is basically an asset manager or a portfolio manager who manages the financial assets or investments of a group of investors. Hedge fund managers make use of complex strategies to limit risks when investing, which is the primary aim where hedge funds are concerned. They also aim to provide the most benefits for the investment of their client, as is with any other investment.
Hedge fund managers have a responsibility of managing the hard-earned money of their clients. Therefore, it is essential that they first have well-developed hard skills in financial analysis and management. Secondly, they must conduct themselves responsibly and ethically in order to ensure that their clients’ investments remain safe and give good returns.
The following courses can be considered when aiming for a career in the hedge fund industry.
Bachelor’s degree in any field is sufficient. However, it would be better to go for courses in the field of finance, commerce or management for early skill-development. These include courses such as BBA, BCom etc.
Chartered Financial Analyst (CFA) is considered to be one of the best courses for hedge fund managers. Alternatively, one can go for Chartered Alternative Investment Analyst (CAIA) or Chartered Hedge Fund Associate (CHA) certifications to become a hedge fund manager.
Master’s Degree: When going for a master’s degree, an MBA is one of the best options for a career in hedge fund management. Look for MBA specializations such as Finance, Investment Banking etc.
A hedge fund manager is a career choice where experience and knowledge also play a vital role. Therefore, in order to become a hedge fund manager, one must have an in-depth understanding of the financial markets. This understanding is developed during the initial part of one’s professional career as a hedge fund manager in which candidates work as interns or trainees under more experienced hedge fund managers.
The job responsibilities of a hedge fund manager can be found given below.
Researching and being aware of market trends.
Analysing different investment options and selecting the best areas of investments on behalf of the client.
Understanding the needs of a client and ensuring that those needs are met when making investments.
Coordinating with the clients for giving them updates, any information they require about the investment or advice on how to manage their funds.
Creating investment portfolios and performing actions such as buying and selling of assets to maximize financial gains from the portfolio.
Generally, hedge fund managers are hired by companies and handle clients on behalf of their company. Therefore, they must also maintain inter-departmental coordination and provide any reports or information to the company as and when required.
Hedge fund management is not a popular field in India primarily because hedge funds are unknown as compared to other investment types such as mutual funds. However, this has not restricted the growth of opportunities in the market. Hedge fund managers have a good scope of employment in a growing industry. The career is particularly known for high earnings and is a respectable job.
Hedge fund managers are hired by asset management companies, financial institutions and investment firms. They can also work as individuals but this is a field in which credibility is what makes or break a manager. Therefore, hedge fund managers have to first find employment and after gaining experience, they can provide their services on an individual level or start their own firm.
The top recruiting areas of hedge fund managers can be found below.
Investment Banks
Banks
Investment Consultancies
Mutual Fund Management Companies
Insurance Companies
Investment Firms
Asset Management Companies etc.
Some of the top recruiting companies for hedge fund managers can be found below.
Edelweiss
JP Morgan & Chase
Barclays
Merril Lynch
HSBC etc.
Hedge fund management is a well-paying industry and candidates who get into this field can afford to lead a lavish lifestyle. Depending on the place of employment, hedge fund managers can not only earn a good salary but also bonuses depending on their performance. The salary details of hedge fund managers in India are as follows.
The average starting salary of a hedge fund manager in India is around Rs. 5 LPA.
For starting level posts while being employed at Analysts, hedge fund managers earn Rs. 7 - 8 LPA on average.
The average salary of hedge fund managers in India is around Rs. 12 - 13 LPA.
Experienced hedge fund managers who work as traders can take home a much higher amount. The salary of experienced hedge fund managers can easily surpass Rs. 20 LPA.
Further, depending on the skills of a professional and their company, a hedge fund manager can make around Rs. 40 LPA.
Book | Author | Publisher |
Hedge Fund Market Wizards: How Winning Traders Win | Jack D. Schwager | John Wiley & Sons |
The Hedge Fund Book: A Training Manual for Professionals and Capital-Raising Executives | Richard C. Wilson | Wiley Finance |
All About Hedge Funds | Robert Jaeger | McGraw-Hill Education |
More Money Than God: Hedge Funds and the Making of a New Elite | Sebastian Mallaby | Penguin Books |
Hedgehogging | Baron Biggs, Isabel Lamberty-Klaas | Wiley |
Salaries that can afford a lavish lifestyle even in expensive cities. Hedge fund managers are one of the most well-paid professionals.
A challenging job that requires you to stay alert and on your feet.
Excellent networking opportunities with some of the richest and wealthiest people in the country.
High pressure job with long working hours, which can create health issues.
Since the market is volatile and shifting, the opportunities in the field can also grow and shrink.
It can be a stressful job as no matter how hard one tries some investments do fail.
Take our test and find out if it suits your strengths.
To become a hedge fund manager, it is best to develop an interest early on. Read and learn about markets, investments and investment strategies, take up relevant courses, complete your certification and look for mentors or companies who will hire you as trainees. From there, you can make your way up in the field.
James Simon, the founder of Rennaissance Technologies, is the highest-paid hedge fund manager in the world. In 2018, Simon’s earnings were $1.6 billion, which exceeds Rs. 12,000 crores as per the current rate of exchange.
The highest salaries of hedge fund managers in India can be found to exceed Rs. 1 crore per annum. Head of investment departments can also earn salaries or Rs. 1.5 crores annually. On average, senior-level positions in hedge fund managers have a salary of around Rs. 40 LPA.
The average salary of a hedge fund manager in India is around Rs. 12-13 LPA.
Hedge fund manager is a good choice of career for a candidate who is motivated to earn money and lead a lavish lifestyle. There are certain demerits that come with the job such as stress, pressure, long working hours, inconsistent market conditions etc. Plus, you have to develop an immense level of competency and skill to get into the field. However, professionals who are excited about the prospects of a lavish lifestyle find it easy to ignore the demerits and work hard to achieve their goals.
Hedge fund managers must have excellent financial analysis skills and an extensive knowledge of the market. Further, in order to become a successful hedge fund manager, a person must also have good communication skills, analytical ability, mathematical ability, moral responsibility, ethical behaviour, ability to put the client’s interests first etc.
An MBA is one of the best choices of a postgraduate course for getting into the field of hedge fund management. The Finance and Investment Banking specializations are best suited for this career.
In order to become a hedge fund manager, the best-recommended courses or certifications include CFA, CHA and CAIA.
Yes, but it will certainly limit your growth. A bachelor’s degree with CFA certification is sufficient to get into the hedge fund management industry. After Class 12th, go for courses such as BBA or BCom or BA Economics etc. to get into the hedge fund industry. However, after some experience in the field, professionals usually feel the need to go for postgraduate education.
A Hedge Fund Manager is basically an asset manager who works in the field of hedge funds. A hedge fund manager uses strategies to ‘hedge’ or limit the risks associated with an investment and find the best assets to invest on behalf of their clients.
