The objective of hedge fund firms is to satisfy the wishes of their wealthy clients. Hedge funds engage in non-traditional investment practices compared to highly-structured banking services.
Because they are not “hedged” or constrained by boundaries, investors can expect an efficient management of a diversified portfolio. Hedge funds need to live up to the promise of optimized returns with minimal risk. In this regard, it is the duty of a hedge fund analyst to make sure every investment undertaking produce positive the results.
The value of a hedge fund analyst
The job of a hedge fund analyst or investment researcher is prestigious but pressure-laden. Sometimes, you can’t quantify the value of the position unless you see the investments bear fruits.
High-net-worth individuals and institutional investors are enamored by the innovativeness of hedge fund managers. Outwardly, it appears the credit is theirs alone. In reality, the decision to proceed with an investment depends on the recommendations of the hedge fund analyst. That is how valuable the position is.
The salary of a hedge fund analyst
The average base pay of hedge fund analysts is not too far off, if not close to the salary of hedge fund managers. That already indicates their contribution to the bottom line of hedge fund firms.
But for illustration purposes, the figure below taken from Glassdoor, a well-known job recruitment site, gives an estimate. The annual salary range is between a low $57K to a high of $129K. The composition of the pay is the base salary plus performance bonus or additional cash compensation if there are any.
But to emphasize, the income may vary on a per-location basis or the size of the hedge fund firm’s managed assets. Hence, the indicated range might be understated.
Most hedge fund firms prefer someone who carries a Master’s Degree, if not an analyst who has obtained a Chartered Financial Analyst (CFA) certification. Applicants with work experience to add to their credentials can be offered $90K by the large hedge funds in the U.S. at the entry level.
The advancement also hinges on performance. Hedge funds look for analysts who display exceptional analytical and problem-solving skills. From the entry point, most analysts spend 2 or 3 up until the senior level and are promoted to the portfolio manager post.
Aiming for the definitive prize
In the course of time, more skills are subsequently developed. Writing, interpersonal, communication, and negotiation skills emerge. Soon marketing and leadership skills come to light.
They went through every facet of the hedge funds. No hedge fund analyst would pass up on the chance to become a hedge fund manager. The financial rewards can be exponentially greater than when you started if you can bring home the definitive prize.