#3 Hedge Fund v Private Equity: Skills & Career Requirements… by Barden

Welcome to the third edition of the Barden Financial Services Asset Management Blog Series. Each blog aims to deliver asset management focused content, to demystify and decode some of the tricky terminology out there, and to shine a light on asset management as a career.

As the experts in financial services recruitment we regularly field questions about asset management, and in particular hedge funds and private equity.

In this edition Fionnán O’Sullivan, Managing Partner with Barden’s Financial Services Practice, zones in on the skills and career requirements for hedge funds and private equity.

Hedge Funds Skills and Career Requirements

Beyond work experience and academics, hedge funds seek the following qualities in candidates:

1. Passion for the Markets / Investing– You must enjoy reading about the markets, learning different businesses, and picking them apart. You must enjoy taking calculated risks by making bets and protecting your downside when those bets go wrong.
2. Independent Thinking / Healthy Scepticism– You have some autonomy at most hedge funds, and you must come up with ideas and spend your time efficiently. You must be able to absorb large volumes of information and decide what to pay attention to and what to ignore.
3. Team Player-ness– Being a team player is critical because no investments happen in isolation. Even some of the biggest hedge funds will have lean teams without much “middle management,” so you must be able to contribute without letting your ego override good team decisions.
4. Emotional Stability– Your fund will lose money because no investment manager is right 100% of the time (or even 51% of the time). When that happens, clients, PMs and other senior players may increase the pressure, you must be able to stick to your strategy. If you’re a highly-strung person, you may be in a constant mode of worry and anxiety as this is an ever-changing market!

Private Equity Skills and Career Requirements 

The private equity career path attracts people who are:

• Competitive, high achievers who are willing to work long, grinding hours.
• Extremely attentive to detail.
• Interested in deals rather than simply following the markets or investing in public companies or other assets.
• Interested in investing and operations and using critical thinking to evaluate companies rather than selling or being an agent.
• Interested in long-term projects such as building a portfolio company over many years, and are also open to non-deal work, such as company monitoring and fundraising.

To get into private equity, you’ll need:

1. A sequence of highly relevant work experience, including transactions and financial modelling.
2. Top academic credentials.
3. A lot of networking and interview preparation.
4. Something “interesting” that makes you appear to be a human rather than a robot.
5. The ability to think critically about companies and investments rather than just “selling” them.
6. A strong cultural fit with the firm – PE firms are much smaller than banks, so “fit” and soft skills are even more important.

Conclusion

As you can see there are a number of differences when it comes to the skills and career requirements for hedge funds and private equity. Keep an eye out for our upcoming blog which is the final one in the Barden Financial Services Asset Management Series, and summarises what we’ve learnt so far. To read the previous editions of the Barden Financial Services Asset Management Series click the links below:

• #1 Hedge Fund v Private Equity: What do they do?
• #2 Hedge Fund v Private Equity: The Nature of the Work 

We’re the experts in financial services recruitment in Ireland: We work on financial services (FS) jobs at all levels, partnering with FS talent and world-class FS teams nationally. If you’re a financial services professional seeking opportunity or an FS leader looking to attract new talent, our experts can help. So get in touch with our team today on hello@barden.ie. Simple.