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Move over Hollywood. Today’s young minds have defined glamorous career fields differently. Popularized by movies such as The Big Short and Margin Call, the financial industry gets more than a second glance by ambitious, young high school graduates, and the field of hedge fund management takes center stage.

The Hedge Fund Manager Career Field

Hedge fund management is the practice of generating investment strategies for clients and monitoring the success of those courses of action until the clients’ financial objectives are met. Hedge fund managers work to attract capital for funds that contain stocks, bonds, and property. They match the investment goals of clients to different funds to generate wealth for their investment firms and the clients who they serve.

Selecting the right investments for clients requires hedge fund managers to assess the performance and the potential of investment products based on key market and regulatory factors. It’s not uncommon for talented hedge fund managers to make seven-figure salaries. However, they put in long, erratic hours that revolve around client schedules and the opening and closing bells of global financial markets.

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Needed Knowledge and Skills

Interpersonal

Hedge fund managers rely on clients to operate. Clients who entrust their savings to investment firms have high expectations when it comes to client services and customer care. Many of them come to hedge fund managers with a series of questions regarding investment products that hedge fund managers must be able to answer in terms that are easy to understand. Other clients just want to make sure that their hedge fund manager is a good person who aligns with their own personal values. As a result, hedge fund managers must have the interpersonal skills to demonstrate that they are both personable and knowledgeable.

Analytical and Computational

Hedge fund managers make a name for themselves by being consistently right about the performance of investment products in various markets. As an investor, one can make a profit whether the financial markets go up or down, and hedge fund managers are masters at doing this. Hedge fund managers’ success boils down to the ability to analyze the market, evaluate investment products and assess relevant political environments. They don’t guess. Instead, they use computer models to recommend data-driven solutions.

Communication

Hedge fund managers must be able to communicate well with all types of stakeholders. This entails more than just presenting charts and graphs to people. Hedge fund managers must attract and retain clients by proactively listening to their issues and crafting solutions that appeal to them. They must also be able to distill segments of data and present the findings to senior leadership and colleagues.

Regulatory Knowledge

As people find new ways to make money, swindlers find new ways to steal it. Increases in financial crimes often result in more governmental oversight and regulations. These legislative changes impact how financial markets react to various investment products, and successful hedge fund managers are often some of the first people to know about those changes.

Professional Credentials

There are a number of impressive credentials that make the average hedge fund manager stand out from other finance professionals. For instance, hedge fund managers often earn the Chartered Financial Analyst (CFA) certification to gain entrance into reputable investment firms. Getting the CFA certification is an intense process that involves education, experience, and three difficult exams. Those who earn this credential are considered to be experts in investment analysis, economics, and portfolio management. This certification is offered through the CFA Institute.

Nothing says that you want a long career in hedge fund management than earning the Certificate in Hedge Fund Regulation. Hedge fund managers who earn this credential demonstrate their knowledge of the laws that govern their industry.

Hedge fund managers often trade investment products that require licenses. Becoming a Registered Investment Advisor (RIA) positions these hedge fund managers to take the Series 7 and 65 exams. After earning Series 7 and 65 licenses, many other opportunities will open to you. The RIA credential and the Series 7 and 65 licenses are both regulated by the Financial Industry Regulatory Authorities.

While these professional credentials are impressive, hedge fund managers almost always begin their careers with a university degree. Here are the top 10 majors and degree programs for hedge fund managers.

Top 10 Academic Majors and Degree Programs

Undergraduate Majors

#1. Finance

Hedge fund management is a part of the financial services sector, and most hedge fund managers hold undergraduate degrees in finance. As finance majors, aspiring hedge fund managers learn about financial analysis, asset valuation, and portfolio risk management.

Prerequisites

There are no set prerequisites for gaining entrance into a finance degree program. However, most schools will expect you to have taken extensive math and science classes during your high school years.

Courses

Finance degree courses include topics such as financial management, mergers and acquisitions, and investment management.

Famous Hedge Fund Managers With This Degree

Ray Dalio is perhaps the most well-known name in the world of hedge fund management. He was introduced to investing at the early age of 12 and never looked back. He founded Bridgewater Associates in 1975, which grew to become the world’s largest hedge fund. The billion-dollar hedge fund manager earned an undergraduate degree in finance from Long Island University’s C.W. Post College.

John Paulson is another New Yorker who has gained notoriety for his business acumen as a hedge fund manager. He started his professional career in sales and decided to switch careers to earn a more secure living for his family. He founded the New York-based investment house, Paulson & Co., in 1994. After a steady start, Paulson became known as a financial guru by earning over $4 billion using credit-default swaps during the mortgage crisis of 2008.

Before his meteoric rise to superstardom, he earned an undergraduate degree in finance from New York University in 1978. He showed a flair for excellence even in those early years by graduating as the class valedictorian summa cum laude.

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#2. Economics

Economics is the study of supply and demand or production and consumption. Its principles guide asset valuation and risk management. As an economics major, you’ll learn about the financial system and how to analyze financial data to predict both opportunities and risks. You’ll dive into issues surrounding economic policy and trade, and you’ll learn about how they impact consumer behavior and buying decisions.

Prerequisites

Many schools require students to take basic math classes before enrolling in introductory courses for an economics degree program .

Courses

You’ll take courses such as economics statistics and data analysis, labor economics, and international finance when you enroll as an economics major.

Famous Hedge Fund Managers With This Degree

Kenneth Griffin is the founder of the multinational hedge fund, Citadel LLC. He showed early aptitude for business and technology throughout his high school years when he operated an educational software firm out of his family’s home in the 1980s. He cut his teeth at Glenwood Capital Investments where its founder, Frank Meyer, set aside $1 million for Griffin to manage. Ken Griffin grew the fund by 70%. In 2003, Mr. Griffin had a net worth of $650 million and was the youngest person on the Forbes 400 list. Ken Griffin earned an economics degree from Harvard University.

Steven Cohen has seen the good and bad sides of hedge fund management, and aspiring managers will do well to take note of his successes and failures. Steven Cohen started off his career as a Wall Street trader for Gruntal & Co. where he made the company $100,000 per day on average. He went on to open two hedge funds, S.A.C. Capital Advisors and Point72 Asset Management.

Despite his successes, he was found guilty of insider trading. After paying for his mistakes, Steven Cohen rebounded and earned the moniker, “hedge fund king” as he was named in a Wall Street Journal article. The billionaire hedge fund manager is also the majority owner of the New York Mets. Steven Cohen got his start investing and learning about the financial markets at the University of Pennsylvania’s Wharton School of Business. He graduated from the school with an economics degree in 1978.

#3. Business Administration

Business administration is a broad discipline that focuses on proven business principles, protocols, and best practices. As a business administration major, you’ll learn about finance, accounting, and economics, which are some key areas of interest for future hedge fund managers.

Prerequisites

There are no prerequisites for entering most business administration degree programs. However, Tier 1 schools often prefer a minimum score on scholastic aptitude tests.

Courses

You can expect to take courses in finance, accounting, and marketing in a business administration degree program.

Famous Hedge Fund Managers With This Degree

Julian Robertson is a retired billionaire hedge fund manager who founded a hedge fund company that was called Tiger Management. During his time as hedge fund manager at Tiger Management, Mr. Robertson mentored dozens of young finance professionals who went on to manage some of the world’s top hedge funds. Mr. Robertson continues to invest his money in funds that are stewarded by his tiger cubs. He built a great legacy, and it all began with a business administration degree from the University of North Carolina (UNC), Chapel Hill.

#4. Mathematics

Mathematics degrees focus on either pure math or applied math. While pure math degrees take a philosophical bent and lead to careers in academia, applied math majors find the doors wide open at hedge fund management firms. Would-be hedge fund managers who major in applied math will learn to solve complex mathematical problems and make predictions based upon quantitative analysis.

Prerequisites

You’ll need to take extensive mathematics classes in high school before you enroll at a university as a mathematics major.

Courses

As a mathematics major, you can expect to take courses such as higher-dimensional data analysis, statistical modelling, and calculus.

Famous Hedge Fund Managers With This Degree

James Simon is known for using data models and algorithms to detect and exploit market inefficiencies. Mr. Simons is a professional mathematician who started the hedge fund company Renaissance Technologies. The success of this company has garnered James Simons accolades as the all-time most successful hedge fund manager. Besides having a net worth of over $25 billion, James Simons has a university institute and an asteroid that are named after him. He earned an undergraduate mathematics degree from the Massachusetts Institute of Technology in 1958 and a doctorate in mathematics from University of California, Berkeley in 1961.

#5. Systems Engineering

Systems engineering degrees train students how to design, build, and manage all types of systems. During the course of study, systems engineering majors learn how to discover root causes of problems and craft solutions that result in the fewest risks. The same principles of logic that systems engineers master are the same ones that hedge fund managers regularly use to craft investment strategies.

Prerequisites

To enroll in a systems engineering degree program, you’ll want to take advanced math and science courses in high school.

Courses

As a systems engineering major, you’ll take courses such as system design, IT architecture, and cybersecurity.

Famous Hedge Fund Managers With This Degree

Lee Ainslie III is the lead hedge fund manager at Maverick Capital. Earlier in his career he worked for Julian Robertson’s Tiger Management firm. The tiger cub stated, “being able to recognize which approach is best for which situation in a given time period is the art of investing. Lee Ainslie III holds an undergraduate degree in systems engineering from the University of Virginia, and he went on to earn a Master of Business Administration (MBA) from UNC, Chapel Hill.

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#6. Government

While technical analysis takes center stage with hedge fund managers, these financial professionals are faced with many other important issues. Some of them come from the political environments in which they operate. As government majors, future hedge fund managers are introduced to political science as well as governmental authority and frameworks.

Prerequisites

There are no prerequisites to enroll in government degree programs at most universities.

Courses

U.S. public policy, political economy, and international relations are just some of the courses that you can expect to take when you enroll in a government degree program.

Famous Hedge Fund Managers With This Degree

Steven Mandel has a long and distinguished career as a successful hedge fund manager. He worked for companies such as Mars & Co., Goldman Sachs, and Tiger Management before starting his own hedge fund, which is called Lone Pine Capital. Forbes consistently ranked Mr. Mandel as one of the industry’s highest-earning hedge fund managers. While he no longer directly manages investments at Lone Pine Capital, he continues to be the company’s managing director. Steven Mandel has a net worth of over $3 billion. He graduated with an undergraduate degree in government from Dartmouth University in 1978 and was even on the school’s board of trustees at one time.

David Einhorn has had a volatile career in the field of hedge fund management. He founded the hedge fund company Greenlight Capital in 1996 and is known for calling out companies that try to skirt the laws regarding the valuation of illiquid securities and real estate. David Einhorn has an estimated net worth of $700 million and holds an undergraduate degree in government from Cornell University.

#7. Psychology

Hedge fund managers often steward the funds of high-worth individuals. It’s in their best interest to understand the decision-making processes of their upmarket clients. If they hold a psychology degree, they’ll be at a distinct advantage over their peers since psychology is the study of human behavior and cognition.

Prerequisites

Most schools want to see that you’ve taken a fair amount of math and science courses in high school before accepting you into a psychology degree program.

Courses

As a psychology major, you’ll take courses such as statistics, cognitive psychology, and social psychology.

Famous Hedge Fund Managers With This Degree

Paul Singer started his career as a lawyer for an investment bank. He started his own hedge fund Elliott Management after only three years of working for the bank. Today, Paul Singer gets mixed reviews from industry insiders. He’s been called the “smartest and toughest hedge fund manager in the industry.” He has also been described as a “vulture capitalist” for his penchant for buying up sovereign bonds at a discount. In 1966, he earned an undergraduate psychology degree from the University of Rochester, and the school conferred an honorary doctorate on Paul Singer in 2017.

Advanced and Professional Degrees for Career Switchers

#8. Masters in Financial Engineering

Financial engineering is a discipline that combines elements of finance, computer science, and engineering. Hedge fund managers who earn advanced degrees in financial engineering learn how to develop models that help to guide decisions about risk management, asset valuation, and portfolio management. It’s a good option for would-be hedge fund managers who want to take their knowledge of applied finance to the next level.

Prerequisites

Most schools require that you have a STEM undergraduate degree or one in a related business discipline as a prerequisite for enrolling in a Masters of Financial Engineering (MFA) degree program.

Courses

Financial engineering degree course topics include option pricing theory, capital asset pricing model, and arbitrage pricing theory.

Famous Hedge Fund Managers With This Degree

While the financial engineering discipline is specifically designed to prepare finance practitioners for careers in hedge fund management, the major is still very new. The first curriculum for the financial engineering major was developed after 1992 by Polytechnic Institute of New York University. Today’s most prominent hedge fund managers earned their degrees much earlier than 1992. Look for the upcoming crop of hedge fund managers to earn this degree in the future.

#9. Masters in Business Administration

Already have a technical undergraduate degree? If you want to switch careers and become a hedge fund manager, earning an MBA with a finance concentration is a good place to start. The MBA degree covers a wide range of business topics that hedge fund managers are expected to know. Combine this degree with a CFA credential, and you’re ready to compete for those sought-after hedge fund manager positions.

Prerequisites

You’ll need an undergraduate degree to enroll in most MBA programs.

Courses

Leadership, advanced microeconomics, and management communication are some of the courses that you can expect to take during an MBA program.

Famous Hedge Fund Managers With This Degree

Seth Klarman is the founder of Baupost Group hedge fund management company and has a net worth of over $1 billion. Mr. Klarman’s career path is a great example of why aspiring hedge fund managers need to take internships and pursue networking opportunities while getting a great education. During his time as an undergraduate, he worked at the Mutual Shares Fund that was guided by Michael Price and Max Heine. This opened the door for him to work for the company post graduation. Seth Klarman didn’t rest on his academic laurels but enrolled in Harvard University’s MBA program. During his time there, his peers were other talented finance professionals such as Stephen Mandel, Jamie Dimon, and James Long. One of his Harvard professors helped him to start the Baupost Group after he graduated with his MBA in 1982.

Leon Cooperman began his career as a quality control engineer for Xerox in 1965. He went back to school to earn an MBA from Columbia University and used it to switch careers into the field of hedge fund management. After earning his MBA and becoming a CFA, Leon Cooperman worked for Goldman Sachs, where he held many leadership roles in the field of hedge fund management. He went on to start Omega Advisors before his retirement in 2016.

Other famous hedge fund managers who hold MBA degrees include Ray Dalio (Harvard University), Lee Ainslie (UNC, Chapel Hill), and Stephen Mandel (Harvard University).

#10. Juris Doctor

The Juris Doctor degree is one that allows graduates to practice law after passing the bar examination. The financial industry is heavily regulated, and few people understand those regulations more than law school graduates.

Prerequisites

You’ll need an undergraduate degree and a great score on the law school admission test to enroll in most law schools.

Courses

Law degree courses include topics such as criminal law, public law, and the trial process.

Famous Hedge Fund Managers With This Degree

Andrew Feldstein is the lead hedge fund manager at BlueMountain Capital Management . He is known for his keen analytical skills and knowledge of the global steel markets. He earned a law degree from Harvard University, but he isn’t the only established money manager to go into hedge fund management after earning a law degree. Famous hedge fund manager Paul Singer also holds a law degree from Harvard University.

Recommended Online Finance Degrees

Explore our featured online programs to find the right match for you today.

Conclusion

Some of the wealthiest men and women in the world are hedge fund managers. However, getting an opportunity to work for an investment firm takes a lot of hard work, solid skills, and determination. Having the right connections doesn’t hurt your cause either. While earning your degree, seek out a mentor, do internships, and join professional associations such as the Hedge Fund Group over at LinkedIn to start racking up quality contacts.

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10 Best Degrees for Becoming a Management Consultant

Get our emails in your inbox, and you’ll get acceptance letters in your mailbox

Get our emails in your inbox, and you’ll get acceptance letters in your mailbox

Ready to start your journey?

Ready to start your journey?