I am actually writing an article on this for a major financial publication. Here is a preview of the rough draft which addresses your question. If you are interested I have 275 more hedge fund articles on my hedge fund blog at http://richard-wilson.blogspot.com
Starting a Hedge Fund Career
Breaking into the hedge fund industry is not always easy. If you are fresh out of school or have not worked in the industry yet, it usually takes some explicit networking and focused internships or part-time work experience before a hedge fund employment opportunity will present itself to you.
Breaking into this industry is all about getting up to speed on the norms of hedge funds, completing several internships and then getting your first full time job. It is very hard to break into but once you are in you are in. Part-time or "working for free" experience for a few months is much better than irrelevant experience. If you have never worked within the hedge fund industry before here are my tips on how to get in:
5 Steps to Your First Hedge Fund Job
1. Read: Get up to speed on the norms of the hedge fund industry. Join and subscribe to the Albourne Village, Hedge Fund Group (HFG), HedgeWorld, HedgeWeek, HedgeCo & HedgeFundBlogger.com. To be more familiar with industry norms and trends I would suggest reading at least four books on hedge funds such as "All About Hedge Funds," "Hedge Funds For Dummies," "The Alternative Asset Hand Book," "Hedge Fund Blog Book," "HedgeMe" or others at HedgeFundBookstore.com. HedgeMe is a great book on the hedge fund industry, explaining the career path options you have, compensation trends and major hedge funds in the industry.
2. Decide on Your Role: There are 3 main employment positions for most people to enter the hedge fund industry. You can be a trader, analyst or sales professional. Analyst is the most common position and sales professional is the least common place for someone new to start, but everything is decided based on your background, skill set and passions. Do not go to a networking meeting or important job interview with a very good idea of what you want to do and which type of position you want to work in. Can't decide where you might fit in? Jim Collins in his book, "Good to Great" suggests making decisions using three criteria. Only take on projects of jobs that draw off of your core strengths, excite you and are relatively lucrative in the long-run.
3. Network: Contact professionals through the job boards and message boards within all of the websites listed above. Contact professionals at your local Chartered Financial Analyst (CFA) chapters or quantitative finance groups in your area. If you have done your homework on the industry and have defined where you might fit within the industry many people will meet you with you or at least exchange emails providing advice on next steps you could take to get your first hedge fund job.
4. Internships & First Jobs: Never stop networking within the hedge fund industry. If you get an internship opportunity always over-deliver on the tasks that are assigned to you without taking up much of the hedge fund managers time. You never want to bring a problem to any boss that you don't already have a couple of potential solutions for. If you monopolize a hedge fund portfolio manager's or hedge fund manager's time you will be not be an intern for very long. One some level what you do at the internship is not as important as who you are working for and just getting exposure to how they operate and what responsibilities you will be expected to carry out.
5. Applications: After you have completed 1-3 hedge fund internships and have two solid references from hedge fund managers you should start trying to interview with hedge funds directly. My experience is that you cannot work with recruiters this early on in your career and most career centers aren't worth even working with if you want to get into the hedge fund industry. You really need to connect with hedge fund or fund of hedge fund leaders in the industry who are well connected and might give you an email address or phone number of someone to meet with. Take every meeting you can get, even if it is not the type of hedge fund you would like to work for. Much of this game is networking and learning how to effectively interview for a very competitive position. I would not even suggest starting to interview until you are 100?ertain you want to work for a hedge fund and you are willing to keep trying until someone offers you a job. If you have any less of a commitment it will usually come out in one way or another. Hedge funds hire for brains, experience, commitment, passion and character.
Hedge Fund Resumes
What is the perfect hedge fund resume for hedge fund jobs? There isn't one. While it is true that a few hedge fund professionals never graduated from college most are very well educated and trained. One highly successful hedge fund manager told me that his firm does not have any hard and fast experience requirements to work for his fund; his team simply looks for people who are hungry, humble, and smart. Below are some of the factors that hedge fund managers and fund of hedge fund groups look at while considering which candidates to hire.
CFA or CAIA Designations
Long only equity analyst, trading or sales experience
Signs of being loyal, passionate, humble and hungry
Quantitative experience or modeling abilities
Education – Ivy League, MBA, Quant Focused PhDs
Something extra – Investor Relations Experience, PR experience, asset gathering abilities, information advantages
High quality name experience (Goldman, AQR, Man Group, Lehman, etc.)
The stomach and desire for a high commission/bonus structure payout system
Hope that helps.