What qualifications do you need to manage a hedge fund?

Question

My boss keeps talking about "taking his city exams", and qualifying to manage a hedge fund. Are there exams to take? How can you study for them?

Answer 1

I have no idea what are "city exams."

Technically, you don't need a license to manage a hedge fund.

In fact you cannot have any active securities licenses with a broker dealer to manage money in a hedge fund.

What you need are qualified investors who believe in you and your investment strategy, then documents to structure the fund, then an entity to have to create presence and organization.

If you plan to work for a hedge fund, unless you have a book of qualifying business to bring with you, it would not hurt to  have a (Charter Financial Analyst) CFA designation.

http://www.cfainstitute.org/cfaprog/inde...

There are a ton of CFA's out there, and I can tell you from being in the business, a fresh or even experienced CFA will get passed over every time for someone with no experience who has large qualifying assets to bring to a fund. Funds have access to lots of talent, raising capital is the key.

If the fund has under $25MM is would fall under state securities law registration. If the fund has over $25MM it would fall under SEC registration.

Answer 2

A personal track record is probably a lot more important than a degree. Lacking that, I suppose managers like to look at certificates.

Answer 3

I'm not sure what exams he is referring to but many other non-hedge fund manager people in the industry must get their series 7 and/or series 63 or other licenses to work in the industry.  

I'm writing an article for Investopedia.com on how to start a hedge fund, you need a team, track record, repeatable investment process, capital to run on, initial investors, etc. etc. etc. It is much more challenging than many people believe.

- Richard

Hedge Fund Group (HFG)

http://hedgefundgroup.org

Answer 4

Academic  qualifications may perhaps help you to perform better. But the essential qualification you MUST have is a successful track record  in managing other  funds. Pay and bonuses are no object and the sky is the limit.