Experience Counts At Hedge Funds

The growth in popularity of hedge funds is creating a number of job opportunities for people with strong analytical skills and the ability to make money for their employers. However, in a job market that one recruiter calls "oversaturated" with talent, experience is definitely a plus.

Kyle Ramkissoon, principal of IJC Partners in New York, says 85 percent of his recruiting business is coming from hedge funds, with the demand for analysts particularly strong right now. "Bonuses are being paid and people are jumping" he says. "Other people are moving up and creating openings. Sell-side people are going to the buy side."

Amidst all this activity, candidates with experience have a real edge. "In general, the funds want people who understand what moves stocks, what are the entry points, what's a good price to pay," says one former hedge fund analyst, who is now out of the business while waiting to start graduate school. "They need to know the psychology involved in the market."

Marc Wiener, of the search firm Mercury Partners in New York, agrees. "If a firm can find someone who is doing the job currently, it pays to bring them on board as opposed to training someone who may not be able to hit the ground running," he says.

"There is apprehensiveness from large corporate investors and funds-of-funds about allocating money to (hedge) funds that haven't proven themselves," Wiener explains. Because of that, "funds need to mitigate risk by hiring someone who has proven to be an idea generator, and not be out chasing noise on the street."

In addition to analysts, Ramkissoon sees demand for trading positions at almost every level except head trader. Echoing Wiener's views, he said most clients "are looking for experienced placements. There's always mobility for people that prove themselves able to make money."

However, Ramkissoon says, while experienced traders, M&A specialists, portfolio managers and equity analysts have a distinct advantage, newly minted MBAs are by no means being shut out of the market. Because financial industry recruiters usually build a relationship with one or two graduate business schools, "nine times out of 10, if a headhunter has a good relationship with a client," they can place some new MBAs. Of course, even here, prior experience is a plus.