CFA, MBA, CAIA, PhD or Masters: What do hedge funds want?

Hedge funds used to focus purely on the all-important 'track record' of any potential new employee. But, with a dearth of talent coming out of investment banks, many have started their own graduate recruitment programmes and there's a renewed requirement for top degrees and professional qualifications.

Getting in at a graduate level is still incredibly competitive. Point72 Asset Management, for example, takes on less than 1% of those who apply to its academy programme, while Man Group received around 1,000 applications for 4-6 entry level vacancies annually.

Hedge funds are notoriously picky when it comes to academic qualifications. The people they hire will emerge from Ivy League or other top universities, with straight As and an unblemished record of achievement. This focus on formal qualifications is a recent development.

“Hedge fund employers rarely look for formal qualifications, beyond a strong undergraduate degree,” says Anthony Keizner, partner at Odyssey Search Partners. “There’s a general suspicion that further education takes someone away from investing in the markets, where they would have been better off learning ‘real life’ experiences on the job.”

But, how do professional qualifications stack up in hedge funds? Institutional asset managers, of course, tend to demand that their analysts and portfolio managers prove their worth by passing all three levels of the Chartered Financial Analyst (CFA) qualification. However, our own figures suggest that less than 2% of those pursuing the CFA designation work in hedge funds, and the CFA Institute says that 3% of its members work in the sector. Among the community of hedge fund professionals on our database, however, the CFA is the most commonly held designation outside of a higher education degree - 20% of people have studied at least one level of the qualification.

As an alternative, there’s the Chartered Alternative Investment Analyst (CAIA) qualification. 36% of those with this qualification work as an analyst or portfolio manager in a hedge fund, it says, but there are still only 9,000 CAIA members globally. Our figures suggest that 3% of hedge fund professionals have the CAIA.

Based on the analysis of hedge fund professionals who've uploaded their CV to eFinancialCareers over the past year, the most prevalent qualification in hedge funds beyond an undergraduate degree is a Masters, with 22% going on to study a post graduate qualification. MBAs might be prevalent in private equity, but hedge funds generally don't demand you go to business school -  just 14% of hedge fund professionals possess an MBA.

Contact: pclarke@efinancialcareers.com