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a class invest in a broad range of investments extending over shares, debt, commodities and
beyond. 1
Hedge funds employ various investment strategies, which guide the activities of the fund. The
strategy outlines the techniques that the fund manager uses to create a positive ROI for the fund.
Specifically, hedge funds hedge their portfolios, use derivatives, short sell, and can use leverage to
produce the desired results. Additional information about the specific strategies can be found in the
Vault Career Guide to Hedge Funds. 2
Specific titles and positions vary greatly from one hedge fund to another, depending on the size of
the fund. In a smaller fund, MBA graduates with several years of experience may have the opportunity
to compete for the director of operations role, overseeing a few direct reports and having direct client
contact. In other hedge funds, MBAs may operate in a research or risk management role, providing
support to the hedge fund manager.
Many larger banks have an area that manages hedge funds. For example, Bank of America and UBS
each have hedge funds under their operations. HedgeWeek 3 has a Web site that covers the hedge fund
industry globally and provides articles, company information, and job postings around the world.
Investment Management
Investment management refers to the management of assets through investment. The investment
management industry, also called asset management, began with a focus on purely relationship-based
investing. For example, a company might have looked to a bank where it had existing accounts to
invest the pensions of its employees.
Today, however, individuals and firms look to specific asset management companies to manage
their money. For example, these asset management companies often are looked upon to create wealth
in the 401(k) plans (employee-based retirement plans) of specific companies. These asset management
companies often use mutual funds as a safer and smarter investment tool for this wealth creation, as
they provide a diversified portfolio of stocks and bonds. Individuals may choose to invest their money
through firms such as Charles Schwab or TD Ameritrade, which allow investors to choose a portfolio
of options for a fee, depending on the level of individual advisement the investor desires.
The portfolio management segment of the investment management industry tends to be highly
sought after as a place for MBA graduates. There are three primary positions within the portfolio
management structure: portfolio managers, associate portfolio managers, and portfolio manager
assistants. The portfolio manager creates the investment strategy, oversees the implementation of that
strategy, and interacts most often with the client. The associate portfolio manager (the position usually
requires an MBA or CFA and several years of experience in the industry) works closely with the
portfolio manager and interacts with the client, although less often than does the portfolio manager.
The portfolio manager assistants provide day-to-day support to both the manager and the associate
manager.