Although 2018 hedge fund industry performance was its worst in nearly a decade, the majority of institutional investors surveyed in a recent Prequin report, expect to maintain or increase hedge fund allocations.

One might reasonably expect that on the heels of 2018’s collective 3.41 percent loss, institutional investors would turn their attentions elsewhere, and some will. However, a clear majority (79 percent, according to Prequin) has opted to place their bets on hedge funds, and plan to maintain and/or increase their allocations.

Isn’t that Counterintuitive?

Not really. Consider this oft repeated phrase, “past performance may not be indicative of future results.” When we read this phrase in a prospectus, for example, human nature leads us to assume that the performance of the investment in question may deteriorate. However, is it not equally possible that it will improve?

One astonishing example of such improvement is illustrated by Ray Dalio’s Dark Horse Pure Alpha fund, which having returned 1.2 percent in 2017, closed out 2018 with a jaw-dropping 15 percent gain. Past performance was no indication of this happy result!

Many of those responsible for allocations, believe that this decade long expansion is rife with bloated asset valuations and flagging economic growth, both of which are being exacerbated by growing protectionism and trade wars.

The natural outgrowth of such a pessimistic view is hedge fund investment. Although no one can know with certainty where we are in cyclical economic and market environments, it is no less clear that the environment is undergoing a shift. In such an uncertain climate, institutional investors are turning to hedge funds—not counterintuitive at all!

This is why 79 percent of institutional investors polled in Prequin’s report, the largest contingent of investors since 2014, plan to maintain or increase their hedge fund allocations in the coming months.

Since the Financial Crisis

The hedge fund industry has seen its obituary written multiple times since the financial crisis and, to be sure, the industry as a whole has seen some dark times since 2008. However, hedge funds continue to innovate, explore new strategies, and adopt new technologies. As a result, we are still here; we are still growing; and we remain relevant. Like Mark Twain’s death, the reports of the hedge fund industry’s demise have been highly exaggerated.

What about Hedge Fund Jobs?

Crypto-currencies, artificial intelligence, machine learning, big data, algorithms, block-chain technology and quants; these are terms that would not be heard in the same breath with hedge funds less than a decade ago. However, it is difficult to find a hedge fund news article today that does not contain at least one of these terms.

This speaks volumes to brighter prospects for hedge fund job seekers. Skills, talents and educational backgrounds once far removed from any relevance to a hedge fund firm are now integral to its daily operation.

As business cycles ebb and flow, and markets wax and wane, the hedge fund industry will be along for the ride, innovating and adapting as it has since the beginning. Demand for hedge fund jobs will continue to grow, to meet the changing needs of our evolving industry.

Let’s ensure that we are on the same page before diving into this topic. Reflation, in the context of this article, refers to implementing a government’s fiscal policy and/or a central bank’s monetary policy in a manner that halts or reverses a deflationary trend. A government’s fiscal policy may include, for example, cutting taxes, or making substantial investments in infrastructure projects.

The central bank’s tool kit would include raising/lowering interest rates and, more recently, quantitative easing. Quantitative easing is the large scale purchase of assets, usually bonds, from banks with an eye toward stimulating the economy. Quantitative easing accomplishes this by increasing the money supply, reducing the cost of capital and stimulating investment.

What Is Reflation Supposed to Accomplish?

A reflation policy is intended to alter the trajectory of a deflationary trend in which the prices of goods and services decline. It is important to note that deflation is not synonymous with disinflation, which is defined as a slowing of the rate of inflation.

How Does Reflation Affect Investors?

As stated earlier, reflation may be implemented via the central bank by increasing interest rates. Such increases will cause the price of existing bonds to fall because they will be forced to compete with new bonds issued with higher yields. Many investors will elect to sell older bonds in favor of purchasing new bonds issued with a higher yield. These are actually called reflation trades.

In terms of equities, historical data show that P/E ratios tend to rise as the rate of inflation increases from greater than 1 percent through less than 3 percent. This fact will impact investment decisions for many investors.

What Is the Effect of Reflation for Hedge Funds?

Hedge funds are investors too, and, as such, must be constantly alert to government and central bank policies that impact the markets. This is particularly the case in the era of Trump, as many of the administration’s policies are deflationary in nature, such as tax cuts and the proposed infrastructure expenditures.

One can sympathize with President Trump’s concern regarding the Federal Open Market Committee’s (FOMC) plan for continued interest rate hikes, which, quite literally, would compound the effects on inflation—effects that were already being brought about by the government’s tax cut and administration plans to step up infrastructure spending. Although roundly criticized for interfering with the course FOMC chair Jay (Jerome) Powell had set, President Trump’s concerns were most likely justified.

Allocations are likely to grow as investors recognize the favorable returns occurring in growth assets and analyze risk in terms of opportunity cost.

What about Hedge Fund Jobs?

Hedge funds enjoyed strong gains in January, with a 1.53 percent gain in HFR’s asset weighted composite index. While not as robust a start to the New Year as 2018’s January gain of 2.74 percent, it is a welcome change in comparison to last year’s overall negative performance, which saw the asset weighted composite index close down (-0.84 percent) for the year.

While the job prospects for mid-level hedge fund professionals remain tight, demand for entry level, back office, and other positions are strong.

Both 2018’s hedge fund performance record and Super Bowl LIII results are in the record books. While it is relatively simple to understand the past, the future is exponentially more difficult to grasp. More than three-hundred fund managers and 120 institutional investors participated in a Prequin survey in an attempt to divine the future of the hedge fund industry. Here’s how they perceive the next 5 years unfolding.

Hedge Funds Fall to Second Place

Currently, hedge funds are the largest class of alternative investment and is predicted to grow by 31 percent over the next 5 years to become a $4.7 trillion industry. However, private equity is anticipated to grow by $1.8 trillion in the next 5 years, eclipsing hedge funds by reaching $4.9 trillion in assets under management.

Shrinking Hedge Fund Investment

Among those currently invested in hedge funds, around 1 in 4 expect to increase their allocations to hedge funds over the next 5 years, while fewer than 2 in 10 plan a decrease in their hedge fund allocations.

Evidence supports that this is already happening. For example, hedge funds experienced net outflows of $11.1 billion in 2018. More to the point, this recent article in Bloomberg presents a graphic illustration of attrition in some of the most lauded hedge fund firms in the industry.

Modest Growth in Hedge Fund Allocations Is Not Necessarily a Negative

Those investors who do allocate to hedge funds tend to invest a larger percentage of their portfolio, typically 14 to 15 percent, as compared to private equity (PE) investors, for example, who typically top out at 9 to 10 percent of their portfolio.

This suggests that even though the number of hedge fund investors may shrink, the size of their hedge fund investment will mitigate the loss of those investors who seek a haven in other alternative asset classes.  In short, the growth of hedge fund assets under management will be slower, but steady.

Single & Multi Family Offices Are Showing Increased Interest in Hedge Funds

Fully two-thirds of hedge fund managers surveyed, believe that family offices will become their primary sources of capital over the coming 5 years. This is consistent with the private wealth origins of the hedge fund industry and a marked departure from the past 15 years of growth, which was driven by institutional investors. Hedge funds are returning to their roots!

What Does This Mean for Hedge Fund Jobs?

The rapid expansion of hedge funds and the corresponding increase in the numbers of hedge fund managers and staff is a well-established fact. However, the universe of active hedge fund firms has leveled off since 2016 to approximately 14,800 hedge fund firms world-wide. Hedge fund managers are largely agreed (91 percent) that consolidation will be the hallmark of the next 5 years, with 26 percent of hedge fund managers suggesting that the consolidations will be significant.

If these predictions come to pass, one might reasonably anticipate substantial employee turnover. The manner in which hedge fund managers approach these challenges will determine the future for jobs in the hedge fund industry.

In Alpha Calling’s previous article, Hedge Funds: A Positive Perspective on 2018, the timing of its publication was such that a definitive conclusion on year-end hedge fund industry performance could not be reached, as the conclusion required access to yet unpublished HFR data for Q4. Moreover, it would have been inappropriate to use another source inasmuch as HFR was used as the data source throughout the first 11 months of analysis. However, we now have that data. Just as predicted, the HFR asset weighted composite index came in negative, to be precise, -0.68 percent, bringing year-to-date aggregate hedge fund losses to -0.84 percent. This compares very favorably to the S&P 500’s year end result, which found that index down -6.24 percent.

Index Definitions

Careful readers may have noticed that the basis of the analysis is the HFR asset weighted composite index as opposed to the HFR fund weighted composite index. Hedge Fund Research (HFR) data was employed for this brief analysis, largely because Hedge Fund Research is regarded as the doyen of the hedge fund industry.

The HFR asset weighted composite index was used, as opposed to the HFR fund weighted composite index because it offers the fairest overview of industry performance. Per HFR, “the constituent funds of the HFRI Asset Weighted Composite Index are weighted according to the AUM reported by each fund for the prior month.” Careful observers will note that most media outlets choose the HFR fund weighted composite index as a reference point. Readers may draw their own conclusions as to why this is so. Also, it should be noted that neither index includes funds of funds.

HFR sports a variety of indices. Anyone interested in exploring their definitions can find them here.

Relative Performance

Alright—2018 ended in the red for the hedge fund industry as a whole—we get that. As has been stated in previous articles, it is understood that, for whatever reason, media outlets will use this to paint hedge funds in the most unfavorable light possible. However, the facts are the facts!

Hedge funds outperformed the DJIA and the S&P 500 in 2018. For example, the S&P 500 closed the year down -6.24 percent, which means hedge funds, in the aggregate, outperformed the S&P 500 by 643 percent!

What’s Ahead for Hedge Funds and Hedge Fund Jobs?

Prequin, another hedge fund industry doyen, in its recent report entitled The Future of Alternatives, offered several interesting insights from their survey’s participants, the most notable of which projects the hedge fund industry to reach $4.7 trillion in AUM in 2023.

However, the same report also projects that hedge funds will slip to second place in the pantheon of alternative assets, overtaken by private equity, currently in second place. The report also concludes that growth in the number of hedge fund firms has plateaued, with some 14,800 firms in the hedge fund universe, a figure that has remained largely unchanged since 2015, which year marked the apex of the post financial crisis explosion of hedge fund starts.

The next 5 years will be ones of firm consolidation and, as a result a shrinking universe of hedge fund firms. However, within an industry whose assets are expected to grow by 31 percent over the next lustrum, it is clear that opportunities in the hedge fund industry will be plentiful.

Investors began 2018 with a cautiously optimistic view, duly supported by 2017’s positive returns, which paralleled the market rally. Hedge fund managers, broadly speaking, shared this hopeful vision and looked forward to improved performance and enhanced fundraising opportunities in 2018.

A Look Back

The year 2018 opened with a robust January HFR asset weighted composite index score of 2.74 percent, but by the end of the first quarter, negative gains in February and March had whittled that down to a meager 0.48 percent gain. Worth noting, is the fact that the Dow Jones Industrial Average (DJIA) fell 2.49 percent in the same period, allowing hedge fund investors to continue to hold their heads high.

2018’s second quarter continued to be marred by losses in April and June of -0.05 and -0.14 percent respectively. May, 2018 turned in a positive result of 0.65 percent, bringing overall second quarter gains to 0.65 percent, which translated into first half gains of 1.23 percent.

Meanwhile, the DJIA turned positive in Q2, gaining 0.7 percent. However, first half gains for the DJIA were deeply into negative territory at -1.8 percent, once again providing cover for those investors so bold as to allocate to hedge funds.

Quarter 3 was an overall positive one for hedge funds, with positive gains posted in July and in August of 0.18 and 0.48 percent respectively. However, October slipped into negative territory, falling -0.05 percent. Nonetheless, overall Q3 gains stood at 0.61 percent and, year-to-date, the HFR asset weighted composite index had achieved 1.68 percent.

Concurrently, the DJIA rocketed, resulting in year-to-date gains of 7.03 percent through the end of September, 2018, which left hedge fund investors scratching their heads.

The story of Q4 is very similar to Q3, with October and November gains in dark territory, at -2.71 and -0.41 percent, respectively. Through November, 2018, year to date gains were negative, albeit narrowly at -0.06 percent. HFR has not published its December data at the time of this writing, but it is unlikely that hedge fund year-to-date losses will exceed those of the DJIA or the S&P 500.

For the DJIA, Q4 was nothing short of a debacle, with year-to-date gains plummeting by -5.63 percent.

Other Noteworthy Data

2018 was marked by a 38 percent decrease in the number of hedge fund firms pursing an equity strategy, falling from 48 percent of firms in 2017 to 30 percent of firms in 2018. Although the equity strategy remains the most popular, at 30 percent, credit strategies are nipping at their heels, rising to 29 percent of hedge fund firm strategies.

Hedge fund fees continue to retreat, with 83 percent of hedge fund firms charging a management fee of less than 2 percent. Just 13 percent of hedge fund firms charged a 2 percent management fee in 2018, and only 4 percent of hedge fund firms charged management fees in excess of 2 percent.

What about Hedge Fund Jobs?

Predictably, hedge fund job seekers will see significant negative press on the hedge fund industry’s performance in 2018—don’t allow this to dissuade you from your goals. After all, the S&P 500 was down -6.24 percent, year ending 2018, a benchmark that hedge funds will no doubt beat by a significant margin. The hedge fund industry continues to play a significant role in the U.S. economy and we fully expect job prospects will mirror that significance.

Here we are, in the closing days of the worst year for the hedge fund industry since the financial crisis. According to HFR, hedge funds, in the aggregate, were down .16 percent in November and 2 percent for the year. Concurrently, Eurekahedge data suggest that the combined effect of investor redemptions and performance based losses have resulted in hedge fund assets under management shrinking 3.4 percent year-to-date, and if that is not enough dismal news—hedge fund closures may overtake hedge fund starts by year-end.

Perspectives

Given the hedge fund industry’s poor showing in 2018, how should aspiring hedge fund professionals assess their prospects for 2019?  The short answer is that one must keep things in perspective.

For example, hedge funds as a whole, were down 2 percent year-to-date and while this sounds rather dismal, it is important to recognize that the Dow Jones Industrial Average (DJIA) is down 9.2 percent, as of December 21, 2018—perspective! Similarly, the S&P 500 is down 9.6 percent, and the NASDAQ is down almost 8.3 percent, as of December 21, 2018—again, perspective!

Starts and Stops

Looking back fondly on 2017, one should recall that hedge fund closures outpaced hedge fund starts throughout the year, yet, 2017 proved to be the best year for hedge funds since the financial crisis. Once more, perspective!

The Rear View Mirror

That rear view mirror, we once fondly gazed into, has been torn away in a collision with the Trump administration. The disrupter in chief is fulfilling the voters’ mandate in spades, from regulatory policy, to trade, to immigration, and to taxation, disruption is the buzzword de jour of this administration. Recently, the FOMC and its Chair (Jay Powell), long considered sacred cows by U.S. Presidents, has been the recipient of President Trump’s displeasure, with what he perceives to be growth killing, unneeded rate hikes.

No one should diminish one’s self by making excuses for poor performance, but that tenet may require revision in the age of Trump, and, before anyone gets their political hackles up, please understand that no one is saying he is right or wrong. What is being said here, is that Trump’s administration is disruptive to the status quo. The markets, as a result, have been affected in ways unlike previous administrations have affected the markets.

What Does This Have to Do with Hedge Fund Jobs?

Simply this—aspiring hedge fund professionals need to put what they hear, see and read about the hedge fund industry in context with broader events in the markets, geopolitics and the financial sector in general.

What we see happening in the hedge fund industry is a snapshot in time, not the best of times to be sure, but still, a snapshot in time. Institutional investors understand this and we have not seen these investors turn their collective backs on hedge funds, so, why should you?

Anyone interested in pursuing a career in hedge funds may find that this moment in history is ripe with hedge fund employment opportunities, as this innovative industry strives to meet today’s challenges as well as tomorrow’s. Rather than hurting hedge fund job opportunities, meeting these challenges requires new talent and, yes, fresh perspectives.

Hedge funds, in the aggregate, turned in yet another lackluster performance in November, 2018, which resulted in an HFR weighted composite index of -0.16 percent, which brings year-to-date performance to -2.00 percent—a hard pill for the industry (and its investors) to swallow.

Also worth noting, is the fact that as of Friday, December 7, 2018, the S&P 500 went negative for the year, having lost all its year-to-date gains and then some. If misery loves company, hedge funds have found their cupid.

Stock Markets as Benchmarks

While this may be the ideal moment in time for hedge funds to make comparisons to the S&P 500 as something of a benchmark, most hedge fund professionals agree that the S&P 500 or the Dow Jones Industrial Average (DJIA) have no value as benchmarks for hedge fund performance because hedge funds are supposed to be uncorrelated. Why? Because they hedge! This necessarily mutes their relative performance in a bull market or rally, which makes any comparisons meaningless.

Moreover, hundreds of hedge funds have not a single stock in their portfolios. Hedge funds have multiple strategies, many of which are based upon investments in currencies, bonds, merger arbitrage, commodities, and other alternative assets that do not revolve around the stock markets.

How meaningful is a comparison to the S&P 500 or DJIA for hedge fund firms employing these strategies?

What Hedge Funds Should Do

These times cry out for the hedge fund industry to develop a meaningful metric that better informs current and potential investors, and silence those that would compare hedge fund performance to the S&P 500 or the DJIA, unhelpful benchmarks at best and downright misleading at worst.

HFRI, Hedge Fund Research Indices, although a respected industry benchmark, is not a satisfactory measure of a given hedge fund’s performance, nor, in fairness, is it intended to be.

For example, pension funds need an absolute return to pay their pensioners. Pension funds have fixed obligations which they must meet. It doesn’t help them much to know that their hedge fund is losing less money than the aggregate return of other hedge funds. In short, investors need to know if a hedge fund can meet their goals over a given time frame, not how it performed compared to an aggregate of funds, the S&P 500, or the DJIA.

The Problem

The boundary between a hedge fund and an active fund manager is blurred, at best. As a result, it might be accurate to say that no definitive hedge fund industry exists. Absent a distinct hedge fund industry, it will be extremely difficult to achieve an industry accepted method or metric against which performance may be measured. This gives rise to another issue. If there is no unambiguous definition of a hedge fund, it is impossible to ascertain the assets being managed at any particular point in time.

What about Hedge Fund Jobs?

Here is the point. The ability to benchmark hedge fund performance is, in many ways, just as important to job seekers as it is for potential investors. Do you want to begin your career at Burger King or Morton’s Steakhouse?

Hedge Fund Research (HFR) reported an asset weighted composite index of -2.71 percent for the month of October, bringing the year-to-date asset weighted composite index to -0.98 percent, and HFR, in mid-November, is reporting continued declines, which suggest that November will also be in negative territory.

As a result, many media outlets are, once again, forecasting the demise of the hedge fund industry.

Are Hedge Funds in a Death Spiral?

The short answer is, no! However, one can make a reasonable argument that the industry is at an inflection point. As of November 23 2018, the S&P 500 was down 2.35 percent for the year and the Dow Jones Industrial Average was in the red as well, down by 2.17 percent, while hedge funds were down 2.71 percent.

It is therefor, fair to say, that hedge funds have fared no worse than the broader markets. At the same time, the hedge fund industry needs to recognize that performance results, which mirror the broader market, are not what investors signed up for.

Hedge fund firms must innovative new and improved investment solutions to attract the investment community. Additionally, hedge fund firms must learn to constrain themselves and project, in fact and in perception, the ability to reign themselves in from irresponsible investments. Moreover, the hedge fund industry must do a better job of keeping pace with the rise of artificial intelligence and other technological changes.

These and other changes are persuading many hedge fund firms to engage in some serious introspection, from the manner in which they serve their investors, to building a business that does not rely on the bespoke talents of its founder.

Key Issues Facing Hedge Funds

First and foremost, the hedge fund industry must determine a course of action which allows them to maintain their value to potential and existing investors.

Secondly, the industry needs to understand, identify and react quickly to external forces of disruption and global mega-trends.

Lastly, and most importantly for our readers, hedge fund firms need to alter their structure in a manner that allows them to remain relevant, not only to investors, but also the workforce of the future.

What about Hedge Fund Jobs?

Of the key issues mentioned above, relevance to the workforce of the future will be the subject of this section.

Expect to see a hiring shift toward hiring people with robust mathematical backgrounds. Be aware that any such hires will need to work effectively with existing staff who have a strong fundamental knowledge of finance and investing. This factor is crucial to the expansion of quantamental hedge fund firms. With this shift, a hedge fund’s search for talent comes into direct competition with the technology sector.

To be successful in this competition, hedge fund firms will need to look more like Silicon Valley. To accomplish this, they must foster internal collaboration and diversity in their workforce, as well as reinvent how they deploy and retain talent.

This bodes well for jobs in the hedge fund industry, which is not facing an existential threat, but rather a metamorphosis.

Regardless of one’s level of preparation, the hunt for a hedge fund job can be exasperating at times. Setbacks and rejections are inevitable, as is the case for most on the job quest, and setbacks and rejections are certainly not exclusive to those seeking a career in the hedge fund industry.

Improvements in unemployment rates do not translate into the hedge fund industry, which is, and will continue to be, a highly competitive arena. In short, it has always been a challenge to break into the industry and the broad improvement in the overall job market has had little to no effect on one’s prospects in the hedge fund industry.

Maintaining Your Edge

Job seekers need to guard against the debilitating effects of setback and rejection. While the emotional wear and tear is all too real, allowing it to overwhelm you, only spells disaster for future opportunities. Job seekers of all stripes, but particularly those pursuing ambitions for a hedge fund job, must project an image of unshakable confidence.

Avoid be overwhelmed by recognizing that you have no control over the obstacles you face, while understanding that you have total control over how you react to these obstacles. After all, most of what you are experiencing emotionally is the result of having no control, so let go! Accept it, and work only on that which you can control―your reaction.

Avoid the Negative Spiral

After weeks of sending out resumes, mining your network and endless interviews, with no success, one’s natural reaction may be to push even harder. While a laudable notion, such persistence can become mindless and unproductive. The experts tell us that we need to disconnect, so that we can restore our energy and recharge our minds.

Establish a job-search routine, carve out time for yourself, and engage in physical activity to avoid the negative spiral.

Seek Feedback from Those You Trust

Having taken the opportunity to step back, restore your energy and recharge your mind, open yourself to the constructive criticism of those you trust. In concert with family members, trusted friends and associates, review your cover letters, resumes, social profiles, and digital footprints.

Make certain your qualifications are clearly and accurately stated, any supporting documentation is error free, and your digital footprint is professional and pleasing to prospective employers.

Consider mock interviews with a mentor to gather a better understanding of how you are coming across to hiring managers because, the longer you have been searching, the greater is one’s tendency to become negative.

Make the Necessary Adjustments

Armed with fresh perspectives and a refreshed mind, one must make the appropriate course corrections as revealed through interaction with family, trusted friends and associates, and mentors. The job-search process can be a humbling one―it can damage one’s confidence and diminish one’s positivism. Be alert to this reality and be constantly on guard with respect to your thoughts.

Ensure that you remain positive and always strive to make course corrections as the need arises. Most of all, recognize that this situation will not go on forever―you will land that hedge fund job!

Hedge funds have long dominated the alternative asset class, both in terms of assets under management(AUM), and also in sheer numbers of firms. As reported by Prequin, hedge fund AUM reached a record high of $3.61 trillion through the first half of 2018.

However, again according to Prequin, the alternate asset universe was around $8.8 trillion at the end of 2017 and, although the hedge fund industry has a generous slice of the pie—who has the rest?

The Alternative Asset Pie

Alternative assets are broadly defined as any investment that is not a stock, bond, or certificate. The primary alternative assets are hedge funds, private equity, venture capital, real estate, infrastructure, private debt and natural resources.

Arguably, hedge funds lead the list in terms of assets under management. However, private equity firms are challenging the hedge fund industry for its crown. Private equity assets under management currently stand at $3.1 trillion, an uncomfortably close second place. The alternative investment universe is expected to reach $14 trillion by the end of 2023.

If alternative assets under management do reach $14 trillion by 2023, which asset class is likely to capture the $5.2 trillion up for grabs?

What Institutional Investors Are Saying

Prequin’s Investor Outlook: Alternative Assets H1 2018 suggests that private equity firms may hold an advantage. For example, institutional investors’ general perception of private equity is 3 times more positive than is their perception of hedge funds. Moreover, institutional investors’ long term plans signal a fading enthusiasm for hedge fund investment. One in four report they plan to reduce hedge fund investment, while one in five are entertaining an increase in investment.

In sharp contrast, only one in twenty-five institutional investors plan to reduce their private equity investment, while one two plan to increase their investment in private equity.

But Wait…

Pitchbook, viewed by many as the doyen of private equity, casts doubt on the ability of private equity to dethrone hedge funds. In their Global PE & VC Fund Performance Report, Pitchbook acknowledges the difficulties private equity firms have had in beating the markets over the last decade, with only 2013 being a year in which at least on-half of private equity firms beat the market…and just barely, at that.

What about Hedge Fund Jobs?

Hedge fund job seekers should focus on the positive. If the next 5 years sees an inflow of capital in the $5 trillion range, roughly $1 trillion annually, the hedge fund industry is certainly going to see its share of that inflow.

How much of that flows to hedge funds is up for debate. However, the industry’s closest competitor, private equity, isn’t as well poised to claw in the lion’s share as some would like us to believe. Even if projections are correct, hedge fund assets under management will grow to $4.7 trillion by 2023. This level of growth, even in the most dismal of scenarios, bodes well for growth in hedge fund jobs. If the current crop of hedge fund professionals can improve performance levels, the future will be even brighter.