A hedge fund manager is an individual or firm that manages, makes investment decisions, and oversees the operations of a hedge fund. They are responsible for using complex trading and risk management techniques to improve investment performance and insulate returns from market risk. Hedge fund managers typically earn above-average compensation, often from a two-and-twenty fee structure from investors. To be successful, a hedge fund manager must consider how to have a competitive advantage, a clearly defined investment strategy, adequate capitalization, a marketing and sales plan, and a risk management strategy.

Hedge fund managers are often the owners of the management firms in charge of the portfolio, meaning that they are entitled to a large amount of the profits that the hedge fund makes. When entering into a hedge fund, investors fund the management fees that cover the operating expenses, as well as performance fees that are usually distributed to the owners as profit. The personal worth and funds of hedge fund managers are usually tied directly to the fund.

Hedge fund managers fall into the buy-side within the world of capital markets, meaning that hedge funds, like other asset managers, are in the business of managing money on behalf of investors, but differ as they tend to be more actively managed, unregulated, and only offered to wealthy and sophisticated investors. They use aggressive and sophisticated investment strategies to make investment decisions on behalf of their clients, called limited partners (“LPs”) .

The main hedge fund strategies include equity, fixed-income, and event-driven goals, and managers tend to be organized by the strategy or strategies that they employ. Successful hedge fund managers must have a deep understanding of the markets, be able to identify and analyze investment opportunities, and make informed decisions based on their analysis. They may have a degree in accounting, finance, economics, or business administration.