To become a hedge fund analyst, one needs a proper college education, industry experience, and possibly certification such as a CFA. Industry expertise in alternative asset management and a specific trading strategy are also valuable. Living in or near a major financial capital can aid networking and attending industry events.
The financial services industry casts a wide net in terms of the types of careers that can be pursued. Hedge funds, which are investment vehicles that adhere to some of the lightest regulations allowed in the investment community, oversee large sums of money for institutions and wealthy families. Fund managers use layers of support ranging from analysts to risk control experts before making decisions. To become a hedge fund analyst, you need to get a successful education and possibly get certified as well as gain industry experience.
Focus on getting a proper college education to become a hedge fund analyst. Investment firms are concerned not only with academic performance, but also with the courses that students pursue. For a career in financial services, degrees in finance, accounting or economics are most appropriate. Some certification, such as a financial analyst recognition (CFA), may be required depending on the seniority level the analyst position holds. An analyst can expect to advance even further with greater industry recognition and certification.
Hedge funds value industry expertise in financial services pockets. Some career paths are more suited to making the leap to becoming a hedge fund analyst versus others. For example, hedge fund management falls into the alternative category of asset management, as opposed to traditional money management, where mutual funds are often grouped together. Industry experience in another alternative management segment, such as a private equity or real estate firm, may increase your chances of finding employment with a hedge fund as an analyst.
The trading strategies that hedge fund managers apply to the markets are highly sophisticated and risky. Many use leverage or add debt when making trades in order to create better profits. Some seek to take advantage of events unfolding in the capital market, such as mergers and acquisitions. To become a hedge fund analyst, you must be able to contribute a specific strategy at a minimum. Managers rely on research provided by financial analysts to locate investment opportunities or discover changes in the economic landscape.
You may need to live in or near a major city or financial capital to become a hedge fund analyst. Top investment firms are usually located in major financial districts close to other financial institutions. Investment management is a highly competitive business, and the convenience of being located in a major city helps with networking as well as attending conferences, seminars and industry meetings with other professionals and clients.
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