New regulations have sent banks scrambling to hire risk professionals. But increasingly this talent is being courted hedge funds, too.
Howard Ross, managing partner at BOC Staffing Solutions, says funds need risk specialists in order to regain assets from investors. Several of his clients, particularly smaller funds with fewer than 20 employees, have spoken with him about hiring chief risk officers during the first or second quarter.
A Fresh Perspective on Risk
That's in stark contrast to the days when only the largest funds managed risk internally. Even then, funds bundled risk and compliance into one position, or farmed it out to their accountant or administrator.
But with new rules looming and money tough to attract, smaller funds, and even larger ones with administrators, are hiring chief risk officers. "Smaller funds are deciding that outsourcing risk and process controls is no longer viable." Ross says "To attract money, funds must be extremely clean, and having a risk officer provides that insurance policy." All that needs to happen for them pull the trigger on hiring is a legislative mandate, he says.
What Skills Are Needed?
So, how do you land a job at a hedge fund? Here are a few suggestions:
· Have an ability to understand the processes and procedures that are the underpinning of a hedge fund, particularly as it relates to Finra and SEC rules.
· Have experience in due diligence and an ability to understand the whys and hows behind a fund's operations and accounting.
· Have a legal and/or accounting background. An audit mentality, and possessing a combination of a law degree, CPA, or CFA represents the ideal skill set.
· Understand the roles that regulations impact a hedge fund on both micro and macro levels. Being able to understand how and what a fund reports is critical in ensuring it doesn't violate SEC rules or federal laws such as the Patriot Act.
It's also possible for someone handling due diligence or credit risk for to move to a fund. Its a matter of having a legal mind and understanding of the processes and controls involved in funds' accounting and reporting.