Hedge funds are a popular investment vehicle that pools money together from a number of investors and invests in securities from an aggressive approach. Today, it’s estimated that the hedge fund industry is worth around $2.4 trillion worldwide with some hedge funds in the United States having several billion dollars of assets circulating in them. That’s why hedge fund accountants have an important job valuing a fund’s assets, evaluating its ongoing costs, and reporting fund performance to its investors. Many hedge fund accountants delve deep into their hedge funds to analyze investments directly and quickly identify accounting issues that must be solved for maximum profitability. Hedge fund accountants also work closely with portfolio managers to utilize their strategic investment tactics in improving the fund’s growth.
Salary
Based on data published in the Robert Half Finance & Accounting Salary Guide, the average annual salary for hedge fund accountants is $68,125, which is equivalent to an hourly wage of $32.75. Hedge fund accountants typically earn between $59,250 and $77,000, but there is the potential for those in managerial positions to bring home up to $113,000 each year.
Beginning Salary
When first starting out in the hedge accounting field, accountants should expect to make between $48,000 and $61,250 with one to three years of experience. This is a higher starting salary than many other accounting jobs, which typically average around $43,250. In general, hedge fund accountants can expect the highest income potential in New York, New Jersey, Massachusetts, and Washington, DC.
Key Responsibilities
Hedge fund accountants are deeply involved in most aspects of the investment process to continually value the hedge fund’s assets. Accountants add up the market values of their hedge fund’s different positions and track the sum daily to evaluate its financial health. Hedge funds are known for borrowing money from various investors, so the accountant must carefully assess where cash is, where it’s going, and where it should be headed. Then, hedge fund accountants keep investors in the loop with financial reports showing what money has been earned or lost in their funds. In some cases, hedge fund accountants may also be called upon to utilize their accounting skills for analyzing assets the fund is considering investing in too.
Necessary Skills
Strong analytical skills are absolutely necessary for hedge fund accountants to successfully value the fund’s growth and create detailed forecasting reports. Hedge fund accountants should have excellent research, report writing, judgment, and decision making skills under pressure. Communication skills are another must because hedge fund accountants often meet with investors to report the fund’s performance. Thanks to technological advancements, hedge fund accountants now review financial data that’s generated through complex software, which makes computer skills essential for tracking income growth properly. Having a strong moral compass is also important for being trusted to ethically work with the large sums of money in hedge funds.
Degree and Education Requirements
Hedge fund accountants must have in-depth knowledge of the stock market and its complicated functioning, so it’s no surprise that post-secondary education is required for this role. At the minimum, hedge fund accountants will need to have at least a bachelor’s degree from a regionally accredited institution. Since competition is heated, most hedge fund accountants decide to attend graduate school for earning a Master of Business Administration or Master of Accountancy (MAcc). It’s suggested that aspiring hedge fund accountants bulk up their schedule with courses related to finance, derivatives, investments, equities, foreign exchange trading, and taxation. Having an advanced degree will make it possible to earn a CPA license and become licensed through the Financial Industry Regulatory Authority (FINRA).
Pros and Cons of the Position
Working as a hedge fund accountant could offer you a great standard of living through a high average salary and potentially thousands of dollars in commissions annually. Hedge fund accountants get to work with funds that aren’t publicly traded, and thus have a higher amount of flexibility in working with capital invested across many asset classes. As with any other career, there are cons that come with being a hedge fund accountant. You’ll face heated competition for landing new jobs and typically have hefty education requirements that must be fulfilled. Many hedge fund accountants remain sedentary for extended periods of time working on their computers and preparing financial reports. Hedge fund accountants often work longer than 40-hour weeks and must handle stress when the stock markets dip.
Getting Started
Many leading hedge funds get upwards of 100 inquiries weekly from students searching for employment opportunities, so be prepared for competition. Landing your first job as a hedge fund accountant is no cakewalk because of the large pool of candidates seeking these well-paid jobs. While earning your education, you should complete at least one internship to obtain real-world work experience with hedge funds. You may also want to connect with hedge fund professionals who’ve graduated from your business school to start networking and building mentoring relationships. Then, make yourself stand out in the field by pursuing the Certified Hedge Fund Professional (CHP) credential through the Hedge Fund Group. Passing this online hedge fund training program and its certification examination will quickly improve your resume by showing your professional competence in investment strategies and hedge fund analytics.
Future Outlook
As new regulations are passed for restricting trading by banks, hedge fund accountants will likely increase in demand for deciphering these changes and watching their effect on their fund’s assets. According to the Bureau of Labor Statistics, employment of hedge fund accountants and other accountants is expected to grow slightly faster than average at 13% before 2022. Many individuals and organizations are calling upon hedge fund accountants to maximize their investment worth. Competition will likely be the strongest at large hedge fund companies like Braeburn Capital, Bridgewater Associates, and SAC Capital Advisors LP, but there are other career choices available too. Hedge fund accountants can choose to work for one particular fund, a group of hedge funds, securities and commodities exchanges, corporations, financial institutions, or other entities involved in the stock market.
If you enjoy the intricacies of investment, can remain calm under pressure, and love crunching numbers, then you could be a great fit for hedge fund accounting. In this fast-paced, high-stakes accounting position, hedge fund accountants craft data analysis reports and formulate specific strategies for improving the overall investment performance of hedge funds.
Another great resource:
30 Top Affordable Master’s in Accounting/Master of Accountancy Degree Programs
