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

hedge funds

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 new 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 universities, with straight As and an unblemished record of achievement.

“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.

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, but there are still only 8,400 CAIA members globally.

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 24% going on to study a post graduate qualification. Just 9% of hedge fund professionals possess an MBA.

Hedge fund professionals are also far more likely to have a CFA than a CAIA qualification. Our own stats suggest that 22% of hedge fund professionals have studied the CFA, compared to just 4% of those with a CAIA qualification. The numbers are skewed by the sheer number of CFA charterholders compared to CAIA members – the CFA has 135,000 charterholders compared to 8,400 CAIA members globally.

Contact: pclarke@efinancialcareers.com

Comments (1)

  1. IMO, getting a CFA and working for a non-hedge fund manager is a more stable career track. The average life expectancy of a hedge fund is about five years. Most hedge funds are a binary outcome. They either make it big (and a lot of money) or fail. I have a CFA, worked for an institution for a number of years and started my own firm six years ago. This was a much more comfortable route for me.

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