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Hiring A Hedge Fund COO

The Chief Operating Officer of a company is in charge of regulative and leadership responsibilities in a startup. Investors require the services of a COO to manage and control the activities in the startup. There are many variables to take into account when hiring a hedge fund COO.


Demand for a COO used to simply stand for filling in the role of an appropriate position. But its importance to the industry continues to rise in lieu of the changes in needs in the business landscape. What used to be a simple position is now a highly valued asset. COOs are becoming the first ‘non-investment’ hire for hedge fund startups.

Startups are generally looking for someone with a proven track record, considerable experience, and good pedigree. Startups may want the COO to have familiarity with the team involved in the startup and the business strategy employed.

The necessary characteristics of a good COO are not limited to those qualities, however. The individuals assigned to hire a chief operating officer usually tend to be the same as the ones hiring investment professionals. The COO however is a non-investment hire, so hiring personnel may find it difficult to evaluate their skill sets effectively. This article serves to provide a guideline on hiring a hedge fund COO.

Factors of Importance in Hiring a Hedge Fund COO

These are the variables that can influence the expectations and requirements in a chief operating officer.

1. The Fund Launch’s Size

The nature of a COO required for a startup is variable on the size of the launch itself. An example is when the launch doesn’t exceed 100 million USD. Startups would want a COO that can serve as a head of operations. The COO is expected to possess aptitude in multi-tasking operations and perform effectively on field in person.

If the launch exceeds 100 million USD, on the other hand, a supervisory breed of COO may be needed. He or she should have a background in overseeing people.  That means the COO should be able to effectively manage staff and relationships within the company.

There are cases when a launch would grow beyond 250 million USD. Startups would have to take into account the considerable amount of people employed to handle the entire undertaking. A COO with significant experience is desirable in order to be able to take on the job. A good means to this is to recruit someone from a larger hedge fund.

2. The Skills Related to the Job

There is currently a difference in opinion within the industry regarding the necessity of accounting qualifications for a COO. Many people believe that it is not needed. There are also some who hold the opinion that having it would equate to effective controls.

The opinion is more cohesive when it comes to other skills, however. Many agree that the core competencies should include finance, taxation, technology, legal matters, operations, and compliance. A COO should also have specializations in non-investment fields depending on the preferences of the startup.

An example is if the company needs to put up complex systems in the environment.  A technologically competent COO is imperative in this regard. The same goes for startups that require knowledge in specific fields like compliance, finance, and any category relevant to the company.

A hiring company should be able to pinpoint the skill set they specifically wish from a COO. This approach enables them to accurately filter through the talent pool the individuals they think would fit best for the job. The method effectively reduces time and resources used in finding the most compatible COO.

3. Definite Benchmarks

A startup would also want to determine the quality of their prospective COOs. Academic qualification does not specifically highlight the competency of a person, but it’s a good way to quantify performance. It also helps when the hiring personnel are trying to choose between prospects of similar skill sets and qualities.

Startups can also take reference from organizations that prospects were previously affiliated with. Past experiences form the foundation of a person’s beliefs, principles, and work attitudes. It can help startups evaluate skills acquired and developed from those organizations as well.


A freshly hired COO may have all the distinct qualities that a startup is looking for, but they’re not magicians or fairy godmothers. They cannot immediately tackle all the problems and burdens carried on by the company. With the help of a small team to assist the COO in his or her responsibilities, startups can ensure that key areas are properly managed and controlled.

The wide plethora of skillsets and scopes in the industry can make hiring a hedge fund COO challenging. The right planning and strategy will help fund managers deepen their considerations on selecting a person that will be helping them out for a very long time.


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