What Is a Hedge Fund Analyst?
A hedge fund analyst is the title given to the person who understands a hedge fund's unique investment strategy, identifies the potential risks in that strategy and makes recommendations to the hedge fund's investment manager on how to best manage the fund.
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Goals
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The primary goal of a hedge fund analyst is to ensure that the hedge fund's investment strategy minimizes risk and maximizes return on investments in all market conditions.
Salary
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A hedge fund analyst's pay varies by the fund's size, investment strategy, investment area and percentage of pay from performance. According to an article in Institutional Investor News by Mark Malyszko, a senior analyst who has three to four years at an investment bank can make $1 million to $1.5 million at a hedge fund, whereas that same analyst in another sector would make $800,000 to $850,000.
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Investment Strategy
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Hedge funds use a variety of investment strategies, including shares, debt, commodities, and options and derivatives trading.
Significance
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One of the defining characteristics of a hedge fund is its performance fees. Performance fees are calculated by a percentage of the fund's profits, and can be lucrative to staff and managers who perform well.
Considerations
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Some hedge funds charge investors fees for withdrawing money from the fund.
Fun Fact
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A hedge fund is basically a mutual fund for the rich. To invest in a hedge fund, a person must earn a minimum amount of money annually, have a net worth of over $1 million and have a significant amount of investment knowledge.
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References
Resources
- Photo Credit Image by Flickr.com, courtesy of David Ohmer
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Comments
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cool!
