Using a Family Office Program or a Hedge Fund Course to Surf the Current Jobs Market

Recent headlines have been pretty dispiriting for many professionals - we’ve seen multiple crypto companies such as Coinbase cancelling job offers just before new joiners were about to start work, and some major financial services companies such as Credit Suisse contemplating mass layoffs, partly resulting from the Archegos incident (see our Speaker Series Webinar #21 for more on what happened at Archegos).

As a result, we’ve seen an increase in questions on the web regarding careers in the hedge fund and family office industries, so we’re going to address some of those here.

Q: What is the role of a family office? What is the difference between Wealth Management and a Family Office?

A: As you might expect, Wealth Management is a function very specifically focused on managing a family’s wealth! The core of the role is to focus on investments – mostly financial instruments such as equities, bonds etc. 

A Family Office, however, may have a much wider remit. A Family Office may just cover wealth management, but generally, it will include several other functions. For example, a very wealthy family frequently needs help with managing its luxury lifestyle. If it has a collection of classic cars, for example, they might have been bought as investments but it’s more likely that they will be used by family members. And so specialists are needed to help with buying, insuring, storing, maintaining and managing those cars. If the cars are stored in an offshore centre, for example, but a family member wants to drive them in Germany, then a huge amount of logistics is needed to get them to the right place at the right time and with the right insurance. Finding and working with the classic car specialists would be a role of the family office.

Similar tasks need to be undertaken about homes, artworks, jewellery etc.

Another example of a family office function is helping to administer philanthropic efforts. Although these are most likely related to finance, they are not investments. Specialist knowledge is required to understand the vast spectrum of available philanthropic opportunities, as also the risks and legal pitfalls. A family office may be expected to coordinate these efforts.

And of course, there are legal and compliance issues arising with family structures and relationships, especially trusts.

Our family office program has 12 modules, only one of which is about portfolio management. The remainder covers the other facets of setting up, managing and servicing a family office, including succession planning, governance, tax and the private bank relationship. As one of the very few family office education programs that cover all the different aspects of a family office, the Henley Family Office Program is uniquely placed to help career movers understand the language and mechanics of these entities.

Q: What are the benefits of getting family office training?

A: We are currently experiencing a surge in the growth of wealth, and an associated surge in the creation of family offices. This is happening at the same time that jobs are being lost, and traditional roles eliminated, in sell-side companies. It might seem natural and easy to transition from investment banking and brokerage roles over to private bank or family office roles. However, the two financial sectors operate very differently.

• It's no use thinking in terms of nano-second trading if your clients/employers have a 100-year investment outlook.
• It’s no use knowing how to value a bond if your client/employer needs to know the value of their whisky collection or their Picasso.
• It’s no use knowing where the stock exchange is if your client/employer wants you to know where their children should go to school.
• It’s no use thinking about profit if your client/employer is thinking about love.

Our family office executive education course can help you to transition from institutional finance roles to family-oriented roles.

Additionally, our family office education programs offer membership in the IPI Professional Network (IPIPN). As one of our recent speakers, Tom Pontin of Shikuma Capital said in our Speaker Series Webinar #36, "Your network is your greatest asset", and the IPIPN is a great way to make connections.

Q: What qualifications do you need to work in a hedge fund? What certifications do hedge fund managers need? What qualifications do you need to run a hedge fund? What skills do hedge funds look for?

A: The simple answer to all these questions is – that depends!

One of the topics we cover in the Henley Executive Hedge Fund Program, our hedge fund certification course, is the extremely wide variety of roles that are involved in this industry. Many people immediately think of portfolio managers, like the gang in the TV program Billions – however, there are so many other roles available it’s tough to list them all. Analyst, lawyer, operations specialist, compliance officer, risk manager, technologist, HR expert, office manager…the list goes on. Each function will have its own qualifications. At IPI and Henley Business School, we offer a chance to learn about how all the functions fit together – a B-School Certificate of Completion credential which certifies that you understand the management of the business, with all its moving parts. So instead of being siloed into a single function, you discover the way the cogs interlock to make the whole machine function.

• It's no use making great returns if you can’t control your cost base.
• It’s no use making great returns if you can’t attract investors.
• It’s no use making great returns if you can’t retain your staff.

People sometimes refer to the excellent running of the non-portfolio aspects of a fund as “Operational Alpha”. Most hedge fund courses don’t cover this crucial knowledge. Getting IPI’s hedge fund professional certification will increase your ability to implement operational alpha across all functions.

Q: Is working for a hedge fund a good career?

A: And again – it depends!

Working on the buy-side is very different from working on the sell-side.

• In general, hedge funds are much smaller than institutional firms – the average size of a hedge fund is around 20 people. That can have a negative impact on employee relationships, staff/management relationships, and career development.
• Most hedge funds are run by their founders, people with exceptional track records at managing money. This does not mean that they are exceptional at managing people. Dealing with bosses with big personalities can be stressful.
• Hedge funds can be very volatile. Even when the markets are going with the fund and profits are being made, investors can pull out for all sorts of reasons – so it’s not a job that comes with a guaranteed, stable, long-term job.
• On the other hand, a small team means good performers can have opportunities that they might not have in a big, siloed firm.
• You may have the chance to invest in the fund yourself at preferential rates, an opportunity only generally afforded to the very wealthy.
• Many hedge funds strive to have a good work-life balance, and individuals can influence that.

At base, the culture of a hedge fund is a prime driver of whether it’s a good place for you to work. It’s imperative to understand the culture of the hedge fund that you might work in and to make sure you have the right fit.

Taking our hedge fund certification course will help you to develop the language and the knowledge you need to ask the right questions and to judge a hedge fund’s culture for yourself.

In this volatile jobs market, finding a new role can really be helped by networking with industry members. One way to make contacts is to attend networking events such as IPI’s Summer Networking Cocktails event in London on July 27th. Whether you’re interested in taking a family office program or a hedge fund professional certification, you’ll benefit by attending. For further information, please contact Lisa So at lisa.so@ipi-edu.com.