A hedge fund analyst understands a hedge fund's unique investment strategy.
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 best manage the fund.
Goals
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
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.
Investment Strategy
Hedge funds use a variety of investment strategies, including shares, debt, commodities, and options and derivatives trading.
Significance
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
Some hedge funds charge investors fees for withdrawing money from the fund.
Fun Fact
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.
