How to Become a Hedge Fund Manager: Career Path, Education & Salary

<h2 id="section---CareerInformationAtAGlance">Career Information at a Glance</h2> <p>Hedge fund managers have usually worked in finance for several years, after completing their <a href="https://learn.org/articles/Finance_Majors_Your_Salary_and_Career_Questions_Answered.html">education relating to finance</a>. They are experienced within the field and take a senior position in this high-risk investment work. Take a look at the chart below for more information about being a hedge fund manager. </p> <p /> <table border="1"><tr><td> <b>Education Required</b> </td><td> Bachelor's degree; master's often preferred</td></tr> <tr><td> <b>Education Field of Study</b> </td><td> Finance, accounting, economics, or business administration</td></tr> <tr><td> <b>Optional Certification</b> </td><td> Chartered Financial Analyst (CFA) certification</td></tr> <tr><td> <b>Skills Required</b> </td><td> Analytical, communication, detail oriented</td></tr> <tr><td> <b>Job Growth (2020-2030)</b> </td><td> 17% (for all financial managers)*</td></tr> <tr><td> <b>Median Salary (2021)</b> </td><td> $145,162**</td></tr> </table><p><i>Sources: *U.S. Bureau of Labor Statistics (BLS), **Payscale.com</i> </p> <h3 id="section---WhatIsAHedgeFund">What Is a Hedge Fund?</h3> <p>A hedge fund is a portfolio of investments based on calculations of the highest return for the lowest possible risk. A wide range of investment and trading activities are employed to ensure that a hedge fund is highly profitable for the investor. Hedge funds may have investments in areas such as bonds, consumer goods, the stock market, or futures. By having a hedge fund, investors place their assets in a range of different areas, which protects the overall fund from market disruption and allows it to be adjusted over time according to the assessed risks. </p> <h3 id="section---WhatIsAHedgeFundManager">What Is a Hedge Fund Manager?</h3> <p>A hedge fund manager is responsible for overseeing either an entire hedge fund, or a specific amount of it. They are required to constantly monitor the risk of the investments against the profit which can be made, and capitalize on opportunities whenever possible in order to gain the biggest financial return. In a management role, you may be expected to create your own investment fund ideas, along with developing investment plans and being responsible for them. You will also lead your investment team, which includes hedge fund analysts. </p> <h3 id="section---HowCanIWorkInThisRole">How Can I Work in This Role?</h3> <p>Most hedge fund managers begin their careers by accruing several years of experience in a relevant financial field. Most will work in the field of investment until they have developed enough knowledge and experience to become a hedge fund analyst. Once you are working with hedge funds, it is possible to move into a management role with further experience, the right connections, and by developing your knowledge. Specializing in a particular area of finance may increase your opportunities to work as a hedge fund manager, as competition is often high when moving into senior financial roles. </p> <h3 id="section---WhatEducationDoINeed">What Education Do I Need?</h3> <p>Those working in <a href="https://learn.org/directory/category/Business_Management/Financial_Management.html">finance management</a>, such as hedge fund managers, are increasingly being expected to hold a master's degree. The BLS suggests that majors such as finance, <a href="https://learn.org/articles/What_is_the_Difference_Between_an_Associates_Degree_in_Accounting_and_a_Diploma_in_Accounting.html">accounting</a>, <a href="https://learn.org/directory/category/Business_Management/Business_Econ./Quantitative_Economics_and_Econometrics.html">economics</a>, or <a href="https://learn.org/articles/bachelors_in_business_administration.html">business administration</a> will give candidates the best chance to work in financial management. Although it is not essential, it may also be beneficial to gain the Chartered Financial Analyst (CFA) certification. This qualification is recognized nationally and will help to demonstrate your knowledge of finance to potential employers or clients. </p> <h3 id="section---HowMuchWillIEarn">How Much Will I Earn?</h3> <p>The salary of hedge fund managers varies depending on the level of experience you have accumulated and the reputation you have earned within the industry. <i>Payscale.com</i> recorded the median salary in 2021 as $145,162. The top ten percent of earners in this report earned more than $491,000 per year. In 2019, Forbes reported that the highest earning hedge fund manager earned $1.6 billion dollars per year, which demonstrates how much the salary can vary for this role. However, such a high salary would not be considered typical.</p>