Posted By: Kaplan Schweser
Published: January 9, 2020
Are you wondering how to become a fund manager? It starts with a desire to understand the goals of mutual funds or hedge funds, so you can make decisions on behalf of investors. The rest requires education, hard work, time, and years of experience. This article covers the steps you can follow over the course of your early career that will increase your odds of becoming a fund manager.
Earning a diploma in finance, accounting, economics, or business administration provides a solid background for a career as a fund manager, and firms require a bachelor’s degree to get started. If your degree is from a well-known university, firms are more likely to notice you; however, you can get noticed in other ways if you didn’t graduate from a top school. One way is to earn your MBA or a master’s degree in finance. Although a graduate degree is not required for an entry-level position at a firm, it can help your resume. Plus, if you want to move up in your career, it might be a requirement for future promotions.
Don’t overlook this critical step in the process of becoming a fund manager. Having at least one internship on your resume can help you find employment after you leave school. It can even open the door to an opportunity at the firm where you interned. So, research the firms in your area that are offering finance internships, and keep applying until you get an offer.
Why is an internship so important? First, it can teach you a lot about the investment industry, as well as introduce you to the day-to-day tasks associated with being a fund manager. You will be able to learn about the role, ask questions, and gain real-world experience in finance while honing your decision-making and communication skills. Second, an internship is an invaluable networking opportunity. You can develop relationships with employees and other interns who can act as references when you begin looking for jobs.
Yes, this is much easier said than done. Start by identifying a company or firm you want to work for, and look for entry-level positions, typically as a financial analyst. These positions are popular and competitive, so you need to set yourself apart. Be sure your resume reflects the qualities you’ll bring to the table and demonstrates some of the skills that make you an exceptional potential employee. Emphasize what you learned as an intern, and keep in mind that most people applying for the position will have an academic background similar to yours, so make sure your resume doesn’t mainly focus on that.
If your resume results in an interview, prepare in advance. Determine the three or four things that set you apart from other candidates and what you want the interviewer to know by the time the interview is over. In the interview, keep these things top of mind, and you’ll be prepared to frame your answers in a way that reflects them.
Presenting yourself as the ideal employee doesn’t end when you get hired. To move into a fund manager position, you need to consider each day a part of your next interview. Simply put, companies promote successful, exceptional employees. The quickest way to move up the ranks is to stay on top of the industry and your firm, making the most of every opportunity to demonstrate your value.
By learning and observing the work in your firm, you will soon see that each fund manager handles a different kind of fund (from a long list) and has a different investment philosophy and style. A few examples are small cap, midcap, large cap fund, funds for emerging markets, balanced funds, sectoral funds, and pure equity funds. Choose one or two that appeal to you (or that you feel are most likely to enable you to move up), and learn all you can about them.
Having fund management knowledge that is specialized adds to your confidence. More importantly, it can give you an edge over others as you start vying for a more senior role on your way to becoming a fund manager.
After you have several years of experience and have chosen your niche, it’s time to advance your knowledge so that you’re one step closer to the fund manager position you want. An effective way to accelerate your learning and demonstrate your commitment to your employer (or other potential employers) is to earn your CFA® charter.
The CFA exam is a three-level examination offered by CFA Institute. Charterholders estimate they spent an average of 300 hours of study per level. It’s a challenging exam, but passing it can make you one of just 150,000 CFA charterholders worldwide.
Earning the CFA charter can boost your career and demonstrate you have what it takes to be a fund manager. But first, you have to pass the CFA exam. Exam preparation packages can help. Explore what’s available today.