<p>so i was reading about the book Monkey Business, and am planning on reading it, but one thing i noticed is that in one of the descriptions of the book it said the authors now work for a hedge fund and go home at 8pm rather than 2am. what exactly does "working for a hedge fund" mean? ive searched google, and i guess im not using the right key words, but was wondering if someone could point me in the right direction. what does it consist of? hows the pay? are there chances for advancement? how do you get into the business? who would you work for? thank you</p>
<p>A hedgefund is in essence a fund that pools together money from wealthy/private investors. Typically, the minimum investment to get in is in the 1mil range thus the people putting cash in these funds are wealthy. They work much like mutual funds in the sense that money is pulled together to make investment decisions, however, unlike mutual funds hedgefunds are not regulated by the SEC. This is a plus because hedgefunds do not have to report their DAILY trades/transactions to the SEC. Also, hedgefunds are not allowed to publicly advertise their funds..which keeps their "Secrecy"intact. The beautiful thing about hedgefunds is that they are typically much more agressive than mutual funds. They are involved in many more instruments other than equities and fixed income such as: forex, futures, commodities etc. And well to be quite frank hedgefund managers are some of the most brilliant money mangers in the financial world (George Soros, Ed Lampert, Steven Cohen etc..).
BTW the "hedge" in hedgefund means to protect a posistion the fund takes. For example this is done in forex by perhaps selling a currency pair and buying another pair that typically moves in the opposite direction as the first pair, in this sense you are protecting your posistion on the first pair if things start to go awry.
The pay is typically very very good, but the hardest part is landing a job. HF's look for the most brilliant money handlers who have some experience in the financial world (particularly IB or Trading). Get a good job at a top firm out of undergrad, attend a top MBA program and hopefully land a job at a fund. It's hard work, but well worth it.
GoodLuck :)</p>
<p>hahaha.....thanks.... im thinkin im probably going to steer clear of all of this and eventually become an actuary</p>
<p>Let's not forget to mention the fact that hedge fund performance has been very erratic (esp. lately - most are underperforming the market) - and many hedge funds fold up shop within a couple of years (sometimes sooner). Because of the looser regulations on hedge funds (as mentioned by a previous poster) if any particular fund is not performing well - they just distribute the remaining capital back to the initial investors and close up shop pretty much anytime they want to.... what's the point? Well, you could be out of a job before you know it.</p>
<p>Furthermore, with increasing amounts of capital flowing into the hedge fund arena, it has been increasingly difficult for all of these players to find abnormal returns - which is why you are seeing hedge funds entering the real estate and private sector arena (typically haunts for private equity firms).</p>
<p>That said, if you can land a hedge fund position at a leading firm with a reputable name and track record, you will make considerable BANK - above and beyond anything you will typically make at an i-bank.</p>
<p>Can anyone find a list of hedge funds?</p>
<p>You arent going to find websites for most hedge funds. They are secretive.
However some do have them. Try: Citadel, DE Shaw.
Some of the guys in the game: Renaissance, SAC, AQR, and a bunch of managed futures CTAs (Dunn Capital, John W Henry).</p>
<p>My dad is friends with the CEO of Citadel.</p>
<p>visiting the citadel site makes me sort of regret not choosing uchicago. but i guess it just means im going to have to work that much harder. thanks everyone.</p>
<p>"Hiring is extremely selective, with less than one candidate in 500 ultimately invited to join the firm. "
hahaha.....now thats scary...</p>
<p>Consider the fact that most of the applicants are from top notch universities. That makes it scarier.</p>
<p>"which is why you are seeing hedge funds entering the real estate and private sector arena (typically haunts for private equity firms)"</p>
<p>That's a very valid point, and it speaks to the convergence in the alternative assets industry. David Rubenstein (founder of Carlyle) has noted that in the future there may not be any distinctions between hedge funds and private equity; basically the 2 are moving into each other's realms.</p>
<p>Those thinking of a career in the hedge fund arena should undertand that because of copycats and a glut of funds, it's become harder to make bank than previously. However, the markets are the purest form of meritocracy, and those with the talent should be able to win more than they lose (that's how it's always been). If one looks to the private equity industry for analogy, there exists a certain group of elite firms (the so called "top quartile") that consistently perform better than the other 75% (which historically haven't even beat the S&P when you take into account their higher risk premium). Similarly, the star performers in the hedge fund industry will be consistent in making bank regardless of the type of activity they engage in (which is boardening) or market conditions (which will always change).</p>
<p>So yes, it can be a huge risk working at a hedge fund; as was previously stated, you could wake up one morning and be jobless. Believe me, this has indeed happened, it can be scary how fast funds can blow up and fall from glory. But then again, if you want stability and a guaranteed safe place to go to every day, go work in compliance at Citibank, this is probably not the field for you. It's the risk factor that allows for those in the hedge fund industry to make more money than i-bankers, work far fewer hours, while wearing shorts and a t-shirt to the office (some places, not all). </p>
<p>It can be good or bad---but just like the market, caveat emptor.</p>