Hedge Funds Seek Health Care Expertise

Investment and financial professionals who focus on the health-care sector are in short supply and strong demand among hedge funds.

"Firms are aggressively hiring, but they have stringent standards for skills, experience, and academic background," says Mary O'Gorman, managing director for New York-based Snelling Search.

Candidates for associate analyst or analyst positions at health care-oriented hedge funds need to possess top-notch grades from one of the better graduate business and undergraduate schools, along with high scores on their standardized tests, she says. A background as an investment banking analyst or as a sell-side equity analyst working with a top health care specialist can be a hot selling point.

O'Gorman says the increasing number of hedge funds making investments in health care is an obvious direction for the industry to take, given that "health care already represents about 16 percent of the U.S. gross domestic product."

What such funds really want is people who possess medical expertise along with financial savvy. This means people who have specialized in health care at a top consulting firm and have experience with private equity are also hot commodities. "These job experiences provide the opportunity to develop strong skills in modeling and valuation analysis," O'Gorman notes. Though not mandatory, a medical degree is also a strong plus.

On top of medical and health-care expertise, professionals should possess "strong quantitative abilities and a keen commercial sense," O'Gorman says. A background in such areas as medical technology and devices, biotechnology, specialty pharmaceuticals or medical services make job candidates stand out from the resume pile.

Because hedge funds are so protective of compensation information, salary levels are difficult to gauge. O'Gorman says compensation varies since "firms don't usually budget a specific amount, because the right background and skill set are the primary considerations." However, money tends to follow the hot sector in the hedge fund world, and for now, that's the health care arena, she says.

However, Todd E. Noah, CPA and principal-in-charge of Rothstein Kass Executive Search Group, a New York City search firm specializing in recruiting and placing financial executives, controllers and accountants, warns that those switching to this arena from others may find the way compensation is calculated a little difficult to bear.

"It's a bonus driven industry and not one focused on base salary," he says. For example, while a hedge fund chief financial officer might make $150,000 to about $200,000 - which might not seem like much for some CFOs - the real money "truly comes on the back end" through bonuses, which are generally determined based on assets under management and fund performance.