The financial services industry has hit a “perfect storm”. The last remaining independent investment banks caved in September, accepting commercial bank status with all the attendant regulations. It’s pretty clear that we’re not in Kansas anymore!
Nevertheless, hedge funds are still hiring. It’s tough for analysts and traders because analysts are overhead and desks can be consolidated. So who are they hiring? Capital raisers, of course. In the current environment, capital is at a premium. Some funds have been forced to close due to massive, across-the-board withdrawals. For other funds, the investors have accepted reassurances and are staying aboard… for now. But there are very few funds, particularly small ones, that wouldn’t love to have some fresh money right now.
If you can raise money, this is a great time for you to find an opportunity with a hedge fund. Maybe you’ve been doing nonprofit fundraising, or retail financial advisory work. With a solid black book, you can land some great opportunities. Most firms will pay a salary in addition to great upside, if you’ve got a great track record. Maybe you haven’t raised any money yet, but you have a great network of HNW individuals and are willing to go commission-only to get your foot in the door. Either way, look carefully at each opportunity and ask smart questions.
Here are some questions you might ask: What kind of marketing support is provided? Are leads provided? Are lists provided? How much upside potential exists? What are the firm’s growth goals? Is equity available? Is there an expense account or travel budget? How soon do they expect the first dollar? How much do they expect in the first year? What’s the investment philosophy? What’s the investment story? What’s the overall track record? What’s the very recent track record? What kind of pedigree do the principals have? How much money is currently in the fund? What’s the lock-up period? The answers will impact your ability to sell.
Remember that there should always be a tradeoff between risk and upside potential. Also remember that, especially in a small hedge fund, it’s all about the management. Spend time getting to know the principals and listen to your gut. If you wouldn’t advise your family to place money with them, maybe you should consider an opportunity elsewhere.
Also make sure there’s congruence between your investor base and the time frame on which the firm expects capital. If your contacts are mostly managers at public funds and the firm expects to see money in the first 90 days then it’s just not a fit. That type of institutional investor spends a lot of time on due dil before wiring any money – and the worst thing you can do is overcommit.
If you can raise capital and you’ve taken the time to pick the right firm, you will make amazing money and have the time of your life. Remember that it’s too easy to find a great fit to stay trapped in a bad fit. There are so many opportunities out there, so many great firms looking for great people. Ask great questions and listen to your gut – and you’ll find the right one for you.
Tags: how to get a hedge fund job, hedge fund job applications, apply to hedge fund jobs, applying for hedge fund positions, preparing for a hedge fund job, hedge fund job qualifications
