Hedge Fund Internships

A hedge fund is an investment fund that caters to high-net-worth individuals, institutional investors, and other accredited investors by engaging in speculation using a credit or borrowed capital. Hedge funds are managed by financial institutions, with hedge fund managers charged with facilitating complex investment strategies. To be successful, hedge funds will employ a host of resources: research, financial strategies and talent – such as analysts and interns.

Consequently, hedge fund internships are programmes offered by hedge fund managers (financial institutions) to undergraduates and recent graduates which is structured to provide an insight into finance, gain hands-on experience and discover the many roles available in the industry for the participants.

The Duties of a Hedge Fund Intern and What to Expect 

There are different types of hedge funds so your duties as an intern will depend on the type of hedge fund you are in. Some of the various categories of hedge funds include Long/short, global macro, arbitrage, event-driven and systematic/quantitative (quant). If you’re interning at a quant fund, the tasks will consist of coding, developing statistical models, and back-testing your ideas to see how they would have performed in previous markets. If you’re at a discretionary fund, your internship tasks will be similar to those of full-time hedge fund analysts. Your duties will revolve around idea generation, financial modelling, due diligence, and a healthy dosage of grunt work. 

Expect to be charged with helping the senior employees employed in trading and research with their day-to-day responsibilities. You might also be saddled with proofreading investment research reports and helping managers find specific information that they need on companies that are traded on the various stock exchanges around the world. All in all, you should approach your internship with the understanding that you will perform duties that an analyst performs – thankless work.

Salary of a Hedge Fund Intern

Because of the laws in the UK, not all internships will qualify you to receive payment from your employer. Thus your salary depends on the most important factor: the company you work for. Consequently, if you are unlucky, your hedge fund internship will not pay you – this is very rare though. According to Indeed.com, the average salary for a London hedge fund intern is £50,157 per year. Glassdoor’s estimate for the average pay is also close as it estimates that the average pay is £47,341 per year. A hedge fund intern earns almost double the average internship prevalent in the UK. The average internship salary is £23,310 per year or £11.95 per hour in the UK.  

If you are reading this and intend on becoming an intern across the pond (the US), the estimated average pay for a hedge fund intern is $90,919 yearly. That works out to be approximately $43.71 an hour, or the equivalent of $1,748/week and $7,577/month. If you intend to have your internship in the US, target these cities: Green River and Gillette (Wyoming), Richmond, Santa Clara, Elk Grove and San Francisco (California) as they make up the list of hedge fund cities that pay the most to their interns.

The salary will be prorated across the internship period and paid in monthly instalments.

List of Firms Where You Can Get a Hedge Fund Internship

There will always be hedge funds and commercial firms hiring interns (undergraduates and graduates alike) that will help their analysts do the grunt work. However, it’s not very common to get an internship, so you must be focused and disciplined in your search.

Below are examples of firms that you can apply to for one of their hedge fund internship programmes. This list is not exhaustive 

• Man Group manages assets worth $23.58 billion
• Capula Investment Management manages assets worth more than $81.1 billion (making it the largest hedge fund manager in the UK)
• Citadel
• Two Sigma has assets under management of around $69 billion making it the second largest hedge fund manager in the UK
• Marshall Wace has assets of $23.68 billion under management
• Partners Capital
• Elliott Associates
• EGX Securities Ltd
• Brevan Howard Asset Management manages assets worth $58.63 billion making it the third largest hedge fund manager in the UK
• Squarepoint Capital has $8.5 billion of assets under management
• Lindsell Train Limited has assets under management of around $33.98 billion
• Polar capital partners have assets under management of around $28.56 billion
• Egerton Capital has assets of $27.42 billion under management
• Cheyne Capital has assets of $27.42 billion under management
• Aviva Investors manages assets worth $26.68 billion
• Alcentra manages assets worth $23.78 billion

Furthermore, sites like LinkedIn and Indeed.com can be useful to your quest of finding internships as internships are advertised on those sites.

Recruitment Process 

The recruitment process [dependent on the firm] will include research from your end, an online application, psychometric testing, pre-recorded video/telephone interview, and face-to-face interview/assessment days. 

Research

Before you start applying for an internship, you should know that getting one is quite difficult so you must do everything necessary to get one. One of the things is research. First, perform a thorough search and create a list of the firms you’d like to work at. The factors that you may consider in your search are will the hedge fund pay its interns, is the culture is good, is there a possibility of a full-time offer upon completion, and so on. Further, this research will be quite useful as it will help you craft an excellent application. At Congrapps, we believe that finding out the uniqueness of each company and incorporating that uniqueness increases your chances of landing an internship. 

Online Application 

Most hedge funds will ask candidates to submit their applications and all supporting documents via their online careers portal. Details on what documents should form part of your application will be highlighted on the job advert – make sure to follow the instructions carefully and submit all the documents required. Due to the high volume of applications that these funds receive, if your application is incomplete it will not be considered. 

The supporting documents will typically include a CV and a cover letter. To be successful you need to meet the purpose of a CV. The purpose of your CV is to get the hedge fund to know you, to know that you satisfy the job description. You must make sure that you enlarge your achievements and highlight your relevant experience. Share some of your past projects and the results of the projects. It’s a great idea to highlight your leadership roles and the ways you encouraged collaboration with team members. If you are still studying, feel free to share relevant coursework and projects that demonstrate your skills. Be concise in your application. Don’t waffle. 

Psychometric testing 

Some hedge funds involve behaviour-based psychometric assessments in their recruitment processes. The behaviour-based assessment is used by them because it provides a fair and objective way for them to understand your strengths and preferences. And the information is used alongside your application to create a holistic view of your suitability for the role.

Do not panic, if the hedge fund you are applying to requests psychometric testing; it will state so in the job advert. We have written about how to pass the psychometric assessments. The assessments, which can be completed via a mobile app or internet browser, are administered by an external testing provider who will send you the relevant details on how to access the tests via email and are also available to provide support if you have any questions.

Pre-recorded Video/ Telephone Interviews

If the firm considers that your application is excellent you’ll be invited to a video or telephone interview, depending on the firm’s process. This will be an opportunity for you to tell the firm more about yourself, your skills and your experience, and will also give you a chance to find out more about us and the role you have applied for. At Congrapps, we call this the mutual learning stage where both parties get a chance to know you better, and you as a candidate get to know more about the hedge fund.

If the recruitment process involves video interviews, you will be sent the invitation along with detailed instructions on how to complete the interview. Please be assured that most video interviews – if not all – can be completed on any laptop, smartphone or tablet, and the resources are usually committed to assisting those who run into a technological issue. 

We have written an article on passing a virtual interview, have a look at it.

Face-to-face Interviews/Assessment Days

Candidates who have reached the final stage(s) of the firms’ recruitment processes will be invited to meet them in one of their offices. This might also be done virtually if the circumstances demand so. Some hedge funds might use just an interview, others might use a mix of an assessment day and interview. Top hedge funds will also provide all the information you need to know about what to expect. On that day you will meet the firms’ employees from across the business, and it’s a great opportunity for all parties to get to know each other. So remember to also be assessing whether they fit the criteria you laid down in your research.

Remember that if you require reasonable adjustments to any of the above recruitment processes, the top firms are willing to be accommodating if you get in touch with them.

Conclusion

The best way to succeed in a hedge fund internship recruitment process is to prepare and practice. Thus attending mock interviews with a career coach from your university is a valuable tool for success here. Another valuable tool is using the vast resources that Congrapps has provided for you. When you have employed these tools feel free to be yourself during the interview/assessment day. Another thing, do not beat yourself up if you feel that parts of the interview have not gone as well as you would have hoped. It’s part of life, everything you do will not always be perfect and that’s ok. 

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Charles is a writer, practising lawyer and personal trainer who loves learning and developing himself. He graduated from Middlesex University, London with eight first-class grades in the second and third years of his law degree, and received a postgraduate offer from Cambridge University. He loves strength training, boxing and encouraging people to succeed in their pursuits (legal ones)
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