How hard is it to get a job at a hedge fund?
Working at a hedge fund is one of the best-paying professions out there. As a result, it's incredibly tough to land a job at one because the applicant pool is very competitive. You need to be a student of the hedge fund industry, an exceptional networker, and a greater interviewee all at once.
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.
Why Work at a Hedge Fund? Hedge funds are good if you're extremely passionate about the public markets, and you want to follow companies and other securities rather than work on deals. “Extremely passionate” means: You're constantly reading about the financial markets in books and other media.
Long and stressful days
The day for hedge fund managers is very long and full of stressful hours. The end of the market day doesn't necessarily mean that they are done for the day. Many hedge fund managers run positions in overnight markets so they will need to monitor those trades, often late into the night.
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.
Hedge funds are widely regarded as offering significant earning potential. Junior level employees are able to achieve salaries upwards of $500k in some places, and the best fund managers can see their net worth ultimately reach nine or even ten figures.
What education is required to become a hedge fund manager? Many hedge fund employers require employees to receive a bachelor's degree in finance or a related specialty like accounting or economics. Some hiring managers may require a master's in business administration as well.
Is it hard to get hired at Citadel? Glassdoor users rated their interview experience at Citadel as 46.3% positive with a difficulty rating score of 3.31 out of 5 (where 5 is the highest level of difficulty).
On the negative side, the hours are still long and stressful (though better than investment banking hours), job security can be low, and your exit opportunities will be limited.
Consequently, most hedge fund managers are paid based on how much they increase investors' wealth—a percent of the return—not on how well they do relative to a benchmark, thus focusing their performance exclusively on positive returns.
Which hedge funds pay the most?
In 2023, the five highest-paid hedge fund managers were Ken Griffin of Citadel, Izzy Englander of Millennium Management, Steve Cohen of Point72 Asset Management, David Tepper of Appaloosa Management, and James Simon of Renaissance Technologies.
Many entry-level openings at asset management firms require degrees in the tree of business majors: finance, economics, or accounting. While a Bachelor of Science in Business Administration is a great well-rounded degree, choosing a school that offers a degree or focus area in finance is preferable.
It is not uncommon for someone with 5 to 10 years of experience (if they last that long) to secure hedge fund salaries that are close to US$ 1 million per year. If you start your own hedge fund, though, hedge fund salaries get a little more complicated.
Grades can be an important factor in getting into the hedge fund industry and investment banks, but they are not the only factor that is considered.
Undergrad: The Ivy League schools (HYP and UPenn (Wharton) more than the others), NYU (Stern), U Michigan (Ross), UC Berkeley (Haas), Notre Dame (Mendoza), Georgetown (McDonough), Northwestern, Duke, UVA (McIntire), Stanford, MIT, UChicago, and arguably the top liberal arts colleges (Williams, Amherst, etc.).
Ivy League Universities: Quantitative firms often recruit from Ivy League schools, including Harvard University, Princeton University, and the Massachusetts Institute of Technology (MIT). Top Engineering Schools: Schools known for their strong enginee.
$249K (Median Total Pay)
The average Portfolio Manager base salary at Citadel is $159K per year. The average additional pay is $90K per year, which could include cash bonus, stock, commission, profit sharing or tips.
As of Feb 6, 2024, the average annual pay for a Hedge+Fund+Portfolio+Manager in the United States is $127,751 a year.
Hedge Fund Analyst Hours and Lifestyle
At smaller, single-manager funds, the average might be 10-12 hours per day, for a total of 50-60 hours per week (weekend work is rare). As you move to larger, multi-manager funds, the hours and stress get worse, so the average may be more like 60-70 hours per week.
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, ...
Who are the richest hedge fund managers?
- David Siegel & John Overdeck.
- Philippe Laffont.
- Paul Tudor Jones.
- David Shaw.
- Chase Coleman.
- Israel Englander.
- Michael Platt.
- Carl Icahn.
The easiest path to landing a job at any type of hedge fund is to work in banking for the first two years out of undergrad. During those years, make sure you develop a good reputation and try to be a top bucket analyst. You need to be very good at excel and have a strong grasp on valuation / modeling.
A cumulative GPA of 3.4 or higher. Proficiency in Excel, Data Analysis, and basic programming is a plus.
They are considered the most prestigious jobs, pay the most, and offer the highest advancement potential and the best career opportunities. At some funds, there are additional roles – for example, at quant hedge funds, there are also quants and programmers with math/statistics/computer science backgrounds.
The average Citadel salary ranges from approximately $85,000 per year for Operations Associate to $236,000 per year for Portfolio Manager. Average Citadel hourly pay ranges from approximately $27.54 per hour for Recruiting Coordinator to $29.25 per hour for Intern.
