Getting hired by hedge funds, which is difficult in the best of times, has gotten even harder as their numbers dwindled in recent years after the economy soured. Although they are even pickier, hedge funds are hiring selectively, though experts caution it’s still at a lower rate than in previous years.
The change in circumstances suits recruiter Edwin Ostrand just fine. He believes the industry had hired too many people in the past. Now, many firms are increasingly looking at passive candidates.
“Their view is that the best people are still employed because you are not going to lay off anyone who was making you money,” says Ostrand, the head of Edwin C. Ostrand LLC of Tampa, in an interview with eFinancialCareers. He expects the “slight uptick” in hiring to continue. “[They] are trying to stay lean and focused by bringing people with multiple skill sets to the table.”
His views were echoed by Richard Wilson, founder of the 80,000-member Hedge Fund Group association and author of The Hedge Fund Book: A Training Manual for Professionals and Capital-Raising Executives, who says hiring in the industry began picking up last year and will continue to increase this year.
“Hedge fund service providers have been hiring quickly as well, and for those looking for industry experience, that is not a bad way to go,” Wilson tells eFinancialCareers. “The hedge fund industry is a knowledge-based industry; everything from trading and portfolio management to capital-raising is specialized knowledge, and if you have a little experience and lots of specialized knowledge, you will be in great demand in this industry."
Career coach and author Roy Cohn stresses that funds are looking for candidates with proven track records who can help them navigate the current tricky market conditions.
“We are in a market like no other we have experienced before,” said Cohen, author of The Wall Street Professional’s Survival Guide in an interview. “A lot of hedge funds have shut down over the past four years. They can afford to take their time [when it comes to hiring] and not even make a decision if they choose not to.”
Hedge fund applicants, particularly those who are not currently employed, need to have realistic compensation expectations, recruiters say. Salaries vary widely. For instance, a trader with five to 10 years of experience can expect $75,000 to $150,000 annually plus bonuses. Employers try to structure their pay around the performance of their fund.
As always, they can afford to be selective about which candidates that they will even interview.
"In particular, a significant number of firms target candidates who have worked at a minimum amount of firms over the course of their careers,” according to Jonathan Stadin, the president of JR Stadin LLC, a New York-based recruiting firm. “A hedge fund is looking to hire an individual who has a top pedigree including education in addition to a track record of creating alpha.”
One client looking to fill a quant job demanded that the candidate score with top standardized test scores in addition to a strong GPA and a PhD. Stadin said he found candidates who met the demanding qualification.
One way that applicants can stand out is by certifications such as the Certified Hedge Fund Professional (CHP). The Chartered Alternative Investment Analyst Association also offers a certification program. The Chartered Financial Analyst designation is also useful for candidates to have, according to recruiters. Certifications alone, though, won’t guarantee success for a candidate.
“They need the experience beforehand, otherwise it’s just book learning,” Ostrand said.