How to get a job in a hedge fund

• Hedge fund jobs can be some of the most lucrative in finance. Top portfolio managers (PMs) earn tens, if not hundreds of millions of dollars.
• Hedge funds are asset management firms, but with the discretion to follow more creative and risky investment strategies.
• Hedge funds used to be scrappy outsiders, but have become far more institutional.
• The largest hedge funds run their own graduate recruitment schemes.

What is a hedge fund?

Hedge funds invest money for their clients. These “clients” used to be wealthy individuals, but are now likely to include institutional investors such as pension funds, too. Unlike “long only” asset management funds, which make money by investing in products that are rising in price, hedge funds try to hedge their bets (hence the name) and ensure that they can make good returns in any market. This means they seek to make money by investing in things that are falling in price as well as things that are rising.

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Hedge funds make money in a falling market by betting on the price of an asset going down in what’s known as short selling, or “going short.” 

The most famous short strategy involves first borrowing shares (or some other security) and then selling them into the market before buying them back again at some point in the future. When a hedge fund goes short, it’s betting that the price of the shares will drop before it buys them back again. The profit is the difference between the price it sells the shares at after it borrows them, and the (hopefully) lower price it pays when it buys them back before handing the shares back to organizations it borrowed them from. 

This doesn’t always work. Stocks can be ‘short squeezed,’ meaning that traders can buy large amounts of a stock they know is being shorted so that they can sell it on for a higher price to hedge funds who need to fulfil their contractual obligations. Hedge funds famously shorted large amounts of GameStop stock in the early 2020s, only for retail investors to buy large amounts of the stock which caused prices to increase by over 1,600% when the funds needed to buy it back.

This is just one tool in the hedge fund toolbox. Funds can also short assets via derivatives, which are agreements or contracts where value is derived from another type of asset like equities and commodities. One type of derivative is puts, where you pay a premium for the right to sell a stock at a specific price regardless of its broader market price at that time. Call options do the opposite, giving you the right to buy an asset, and can be used when you expect the price of an asset to rise.

There are also a variety of strategies that are market neutral; arbitrage focuses on finding assets where values are intrinsically linked (like Coke and Pepsi) but change at different rates, then capitalizing on that difference.

By using short selling and other techniques to hedge their investments, hedge funds aim to generate massive returns for their investors. Long-only funds rarely achieve returns of more than 10% when investing in low-risk products such as European equities, but top-performing hedge funds can achieve returns of 20%, and sometimes more, in the same period of time. 

Given that hedge funds have traditionally charged investors a 2% management fee (2% of the funds they invest) and a 20% performance fee (20% of the profits they earn), this can make working for a successful hedge fund very lucrative indeed. Everything is geared towards chasing “alpha”: returns that are above and beyond the “beta” generated by a moving market. When you work for a hedge fund, you are laser-focused on investment performance.

“Hedge funds make money by capitalizing on market inefficiencies, which are always fleeting opportunities,” wrote Dominique Mielle, a former partner at hedge fund Canyon Capital in her memoir “Damsel in Distressed”. Colin Lancaster, global co-head of macro & fixed income for Schonfeld (a hedge fund with $22bn in AUM), said in his memoir that the goal of every hedge fund is “finding an imbalance” and then profiting from it.

What are the different types of hedge fund?

While all hedge funds are chasing imbalances, the imbalances you find will depend on the kind of strategy the hedge fund you work for is pursuing. The majority of hedge funds are one, or multiple, of the below:

Long/short: These hedge funds go long some of the time. They also go short some of the time. They go long when they expect the price of a product to rise, and they go short when they expect the price of a product to fall.

Macro: Macro funds invest to benefit from global macroeconomic trends (they go both long and short). Lancaster says global macro hedge fund managers look for imbalances between countries in things like economic growth, interest rates and central bank reactions. They profit from the moves in that country’s interest rates, or from moves in its foreign exchange, equity, or credit markets. In other words, they profit from the market reactions that those moves provoke.

Arbitrage:  Arbitrage-focused hedge funds seek to make the most of price differentials between related securities products. At their simplest, so-called “statistical arbitrage” funds put stocks into related pairs. If one stock in that pair does well and outperforms the other, it will be sold short (in the expectation that its price will then fall again). The underperforming stock will be bought (in the expectation that its price will rise to meet its pair). Arbitrage funds are often quantitative: they use complicated computer programs to determine what to buy and sell.  

Event driven: Event driven hedge funds try to profit from one-off events. For example, when one company decides to buy another, it will usually pay more than the current price for the shares and event driven funds will seek to benefit from this. A burgeoning asset class that hedge funds are entering is prediction markets, where ‘event contracts’ are traded with values that correlate to whether real-world events do or do not happen.

Systematic/quantitative: Increasingly, hedge funds are “systematic:” they use high speed computer algorithms to unearth market inefficiencies and to place trades in the brief time period when there’s money to be made before the inefficiency is discovered by other funds in the market. Systematic hedge funds operate across different market strategies, and compete for talent with a growing contingent of electronic ‘prop trading’ firms.

Multi-strategy funds: A lot of the biggest hedge funds (like Citadel, Balyasny, Millennium, Schonfeld, or Point72) are multi-strategy hedge funds: they pursue all the strategies above, and more. 

Hedge funds also vary by the vast range of products they invest in. For example, there are credit hedge funds (which invest in credit), distressed hedge funds (which invest in credit which might never be repaid, also known as “distressed debt”), and emerging markets hedge funds (which invest in emerging markets).

The rise of the multi-strategy hedge fund: how hedge fund jobs are changing

“In the beginning, hedge funds had a rebellious aspect to them, an anti-establishment mentality, and a certain scrappiness,” writes Mielle.  “We wanted to do things differently, discover new investing ways. We wanted to be original, innovators, inventors, explorers. It was about thinking creatively, outside the box… In the industrialization age, we started mutating into the big, stodgy guys ourselves.”

The biggest and stodgiest of guys are the global multi-strategy funds. These top hedge funds have tens of billions under management, much of it from the pension funds and other institutional investors that like nice, safe, consistent returns rather than risky mavericks. Those mavericks, however, are the ones delivering results by competing against each other within the same hedge fund. Most multi-strategy funds employ “pods”, a small team and pool of capital under the purview of a portfolio manager.

Some hedge funds are so committed to their multi-pod strategy that portfolio managers don’t even know what their colleagues are doing. Their goal is, as a collective, to generate as much profit as possible, regardless of where specifically it comes from. The central structure of the fund deploys capital to the pods as it sees fit to meet its desired return and risk profile, as former hedge fund PM Marc Rubenstein explained.

As Mielle points out, the sheer size of hedge funds, combined with new technology (allowing financial statements to be accessible online), regulations (requiring the same disclosure to all investors), and competition, have eroded many of the market inefficiencies that hedge funds formerly thrived upon. 

The whole point of a multi-strategy fund is to be market neutral. The fundamental idea that Ken Griffin had when setting up Citadel was that multiple pods, following multiple strategies, with money balanced across them in the right way, would balance out the volatility inherent both in the market and in the hedge fund concept as a whole.

For example, Citadel has posted a variety of results in 2025. Reuters reported that Citadel’s flagship Wellington fund (which is multi-strategy itself) posted returns of 10.2% last year, while its ‘tactical trading’ fund (which combines human stock picking with mathematical models) posted more impressive returns of 18.6%. Citadel's equities and fixed income funds posted returns of 14.5% and 9.4%, respectively

Some hedge funds take a different approach. Qube Research and Technologies, one of the fastest rising hedge funds in recent times, is centralized. This means that its army of quants feed their strategies into a single central book which a small group of PMs collectively use to influence their strategies. People at centralized funds like these often get limited visibility into how profitable their strategies really are.

At a time when banks are conducting mass AI-driven layoffs and private equity funds are recovering from a difficult few years, the majority of multi-strategy funds are growing. Millennium, the world’s biggest hedge fund (as measured by headcount) has 6,670 employees according to its most recent ADV form filed with the Securities and Exchange Commission. Citadel reported 3,284 employees, of which 1,314 are investment advisory staff. Point72 had 3,345 and 1,587 in those respective categories.

The ever-increasing size of multi-strategy hedge funds can be seen in how big they’ve started debuting. Citadel, a pioneering multi-strategy fund, was founded with $4.6m of capital by Ken Griffin in 1990. In 2024, a pioneering fund such as Bobby Jain’s Jain Global opened with around $5bn, or a thousand times as much capital. 

The lion's share of assets under management (AuM) in the industry goes to multi-strategy funds. Citadel, Millennium, and Point72 are all multi-strategy funds; they have $77bn, $92bn, and $58bn under management, respectively. That’s up from $67bn, $77bn and $40bn a year ago. There are also some huge non-multistrategy funds, though. Rokos Capital Management is a macro hedge fund with $20bn in AUM. Leopold Aschenbrenner's Situational Awareness, a long/short hedge fund focused solely on AI-related stocks, had a peak AUM of $45bn before plummeting to $10bn earlier this year.

Career paths in hedge funds

Read More: All the jobs in hedge funds and how to get them 

If you want to work for a hedge fund, you probably envisage yourself as a trader or portfolio manager. However, hedge funds (like investment banks) have teams of support staff working in areas like compliance, technology, risk, and operations. Some of the key jobs in hedge funds include: 

Portfolio managers: Portfolio managers are at the top of the hedge fund tree. They listen to what analysts say and decide how to allocate investors’ money to achieve the highest returns. They are in charge of the whole investment portfolio (hence the name). Everyone wants to be a portfolio manager.

Recent filings from a court case involving BlueCrest, a large family office (owned by Mike Platt) that operates as a hedge fund, explained a bit more precisely how portfolio managers operate.

To start with, they (or members of their team… or AI) carry out market research to form a long-term view of the market of their investments before the rest of the market. They then construct a portfolio and seek to minimize the amount of cash that backs up the market exposure they naturally assume by taking any market position. That exposure is partly backed by cash with the balance being leverage (debt) from a counterparty such as a bank or broker.

Analysts and researchers: Analysts spend their days poring over the financials of the companies and financial products that hedge funds invest in. Their analysis and research help determine the fund’s investment strategy.

Quants: Hedge funds also employ quantitative specialists or ‘quant researchers.’ These quants develop complex mathematical equations which tell the fund when to trade in order to make the most money using its chosen strategy. Quants who build algorithms work with quant developers, technologists who translate the algorithm into computer software which can implement the algorithm’s strategy. These roles have started to converge thanks to AI, making quant jobs more multi-faceted.

Traders: You might think being a trader in a hedge fund is the most exciting job there is. You would probably be wrong. Traders in hedge funds are often “execution” traders.  Execution traders simply push the button to execute trades. They don’t get a chance to devise their own trading strategies, and they don’t get a chance to take their own positions on the market. What they do get is a chance to become experts in “market timing”. Execution traders watch the market closely and know when’s the best time to place their trades. 

Sales and marketing professionals: Hedge fund sales and marketing professionals liaise with investors. They help sell the merits of the fund and persuade investors to hand over their money to be invested. Investor relations professionals fall into this category.

Recruitment professionals: Sometimes hedge funds rely on headhunters and external recruitment firms to hire in top investment professionals. Sometimes they do things in-house. 

Hedge fund recruitment teams can broadly be categorized into two groups. General recruitment teams include campus recruitment staff who organize and run the expanding internship schemes at major funds. There are also ‘business development executives’ tasked with making the most important front office hires. Senior ‘BDEs’ can earn over $1m.

Technology professionals: As hedge funds become increasingly large, the systems required for them to be successful become more complex. As a result, technology divisions in multi-strategy hedge funds are often the largest non-investment teams.

There are various different types of tech you could be working on, but it can be broadly classed as ‘high-level’ or ‘low-level’ tech. An engineer in the former might work on the user interface for an application traders use to conduct data analysis. An engineer in the latter might work on the low latency infrastructure that connects that data application to the fund’s data centre as quickly as possible.

Risk managers and compliance, legal, and operations professionals: As hedge funds have become bigger (and more boring), they have accumulated the sort of support structures only previously seen in investment banks. Hedge funds now have risk management, compliance, and operations professionals. These jobs will be similar to banks - except you’ll probably have to be more of a jack of all trades. It’s normal for compliance and legal roles to be blended in hedge funds, for example.

What skills do you need to get a job in a hedge fund?

Read More: What skills do you need to work in a hedge fund? 

Hedge funds can be very hard to get into, even via their graduate schemes. Major funds like Millennium, Citadel and Point72 routinely accept less than 1% of applicants. Applications to these funds can involve psychometric assessments testing for specific traits; the traits each hedge fund is looking for might vary.

Ken Griffin of Citadel is looking for excellent communicators. Dmitry Balyasny is looking for people with “investment discipline.” If you want to work at Point72 with Steve Cohen, you should be in a “constant state of improvement,” and be willing to ask questions, even if they make you look stupid.

How do you demonstrate these traits when applying for graduate roles? The most direct way is to get involved in your school’s investment society, or to run a trading strategy using your own money. You can also improve your chances by participating in Olympiads, hackathons or professional sports (lacrosse is popular at Citadel).

Something that you’ll undoubtedly need to develop to survive in a hedge fund is thick skin. Walleye CIO Will England says portfolio management jobs are “extremely toxic” and that few have the right “psychological profile” for the role.

Education & qualifications for hedge fund roles

Read More: What qualifications do you need to work for a hedge fund? 

Hedge funds have a type. To stand a good chance of breaking into one of the major graduate schemes, your best bet is to study a STEM subject like mathematics (if you want to be a quant), or finance/economics (if you want to be an analyst). Choice of school can often be important. Harvard. Columbia and NYU are popular among hedge fund employees in the US, while Oxbridge and Imperial are common in Europe.

Around a third of people working in major hedge funds today have master’s degrees. MBAs used to be popular, but have fallen out of fashion while masters in financial engineering (MFEs) have emerged as an alternative. People doing MFEs tend to become either quants or software engineers. PhDs make up a fraction of hedge fund headcount, but some funds like Renaissance Technologies or Capital Fund Management have a reputation for hiring large numbers of them.

There are supplementary qualifications you could get to look more impressive. You could spend 900 hours becoming a CFA charter-holder, a path trodden by ~4% of hedge fund employees today. The chartered alternative investment analyst (CAIA) qualification is more specific to hedge fund jobs but even more uncommon. 

How is AI affecting hedge fund jobs?

Read More: How AI is affecting every job in hedge funds 

Some people in hedge funds will be very happy with the progression of AI in recent years. Others have already been locked out of the industry because of it.

Operations professionals without a technical base have been hurt the most. Recruiters say that layoffs for these professionals happen “on a weekly basis” and their tasks are then automated. 

For PMs, meanwhile, the technology can be a double edged sword. Hedge funds are developing proprietary tools which allow their trading teams to analyze data at never-before-seen speeds. The difference between a good PM and a great PM will become much more prominent in the next few years, and the pressure on PMs to perform will become even more crushing than it already is today. The investment analysts below those PMs are in even more pressing danger; Anthropic said in March that up to 57% of the duties of an analyst could theoretically be performed by AI, making it one of the most exposed jobs in the world to AI.

AI is causing a convergence of roles. Quant researchers are now absorbing responsibilities of quant developers and sometimes even software engineers. Engineers that specialized in one area like low latency C++ may also need to prove their worth across the tech stack, and interviews are evolving to test you across a wider range of technical topics.

Salaries and bonuses in hedge funds

Read More: Hedge fund pay is doing very well after a bumper 2025 

Compensation at hedge funds, particularly for senior employees, is defined by bonuses. The size of your bonus can be impacted by multiple things, but the size and profitability of the portfolio you’re working on is most important. In a top pod at a multistrategy fund, PMs can make tens of millions of dollars, while analysts make multiple millions. 

For PMs, pay is directly correlated to your PnL (profit and loss), and you can be paid as much as 25% of profits generated at a major fund. For investment support staff, pay is instead discretionary (decided by your PM or other senior members of the fund). Take Citadel’s commodities division, for example. In 2024, it distributed $600m in bonuses across 20 portfolio managers ($30m on average). Those PMs then had to distribute bonuses to their team based on what they were allocated and pocket the remainder. Some teams had much larger bonus pools to share than others. 

In most major hedge funds, bonuses are deferred, which means you have to either keep working at the fund until they mature, or you need to convince a new employer to buy those bonuses out when you leave.

Being poached by a top multi-strategy fund can be very lucrative, too, especially when they cash you out of those deferred bonuses. Millennium has paid its most desirable new portfolio managers up to $100m; Balyasny has been known to pay $50m. However, this includes the cost of hiring team members for pods and setting up a trading operation.

Only the top portfolio managers earn this amount. Our 2026 Salary and Bonus survey showed that junior staff (usually analysts) earn around $230k, with more senior staff earning around $840k. The portfolio managers and MD-level employees in our survey reported average compensation of over $2m, the vast majority of which was in their bonus.

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