If you happen to work in investment banking and don’t put in at least 90 hours a week, you’re not even in the game. Bankers understand this, and often become so entrenched in the long-hours culture that they find it difficult to escape into another venture. At hedge funds, meanwhile, the ‘reasonable’ working week is around 70 hours.
Around 80% of people working in hedge funds work between 50 and 70 hours a week, according to a recent report from consultants Benchmark Compensation. What’s more, only 17% of respondents to their survey describe this as a poor work-life balance, with 38% rating it as above average or excellent.
70 hours a week is not extreme, but nor does it make for an insignificant period of time in the office. Hedge fund professionals and recruiters never cite shorter hours than banking as a selling point for making the switch to the buy-side, but the culture means that you’re unlikely to be chained to your desk for the sake of it.
“Unlike banking, consulting and the law, hedge funds are not client-serving, professional service organizations. Hedge funds get paid on their results – the performance of the investments they make,” says Anthony Keizner, managing director of headhunters Glocap. “This stands in contrast to a ‘billable hour’ set-up or trying to impress a client with the turnaround speed of a document, which often translates into working long hours into the night.”
The quality of life in a hedge fund is more “exciting and entrepreneurial” than in an investment bank, adds Peter Elliott, CEO of hedge fund recruiters Elliott James. People don’t go into hedge funds expecting to be able to clock off early and spend time with the kids, they go to escape bureaucracy and chase the big pay packets.
“People are still expected to work long hours to achieve their performance and at the smaller hedge funds benefits are insignificant,” he says. “Essentially people are chasing the potential for greater compensation and the chance to work in a dynamic environment.”
Some hedge funds are not averse to indulging in casual invasion into their employees’ personal time for the sake of it. Steve Cohen allegedly ran a four-hour conference call for SAC Capital’s portfolio managers and analysts on Sunday evening to “ascertain their best trading ideas”.
What’s more, it’s not uncommon for hedge funds to cover, say, Asian markets from the U.S., which can make for unsociable hours. “Not all hedge funds are created equally, and the lifestyle at some is very challenging. Particularly for those that trade on foreign markets, they often demand their people work long and unconventional hours,” says Keizner. “At other funds, Sunday meetings to discuss their positions and the trades for the week are a regular occurrence.”
Hedge fund managers shouldn’t be afraid of burning the midnight oil – Greg Coffey, the famous ‘star’ hedge fund manager worked through the night, even when on holiday with his family. He retired at 41 with an estimated fortune of $665m.