Getting into Hedge Fund front office is tough – If you’re working in the back office at a hedge fund right now, don’t be so upset! It is definitely not the end of your career, in fact, it is a great opportunity!

1. “Back Office” vs. “Front Office”

There are many groups at a large Hedge Fund, but they are still commonly divided into three main categories: The “Front Office,” the “Middle Office,” and the “Back Office.”

If you earn revenue, research how to make it, trade it, or directly manage it, you’re front office. Pretty much anything with a two-letter acronym falls into this category: IB, WM, PE, S&T, HF, ER

What about “middle office”?

By definition, “middle office” applies to any role that supports those people in the front office. Specifically in HF industry, “middle office” refers mostly to accounting roles.

And the “back office” at a hedge fund is every role that supports the trading and accounting groups, such as Pricing, OTC & Settlements, Cash & Collateral Management, and so on.

Of course this is just a general rule, in some hedge funds, roles might not fit in the categories above.

2. Is the Back Office the End of the World?

The answer is no!

That is, if you have a long-term plan in mind. You surely can get out, especially if you accept a support role in an early internship or a role that has significant overlap with trading.

And if you want to stay in the Back or Middle Office for the long term, more power to you.

You’ll still be better off than 95% of the population; it’s just that your compensation and exit opportunities can’t be compared to those of front-office roles. However, there are some distinct advantages to taking on a support role at a hedge fund:
#1 You can learn when being around traders
If you’re lucky enough to sit in close proximity to the trading desk, always look for every chance to engage traders about the market, the asset classes that they trade, the economic environment, and even general financial news. There’s a fine line between “stalking” and “inquiring” so focus on trader(s) who don’t mind talking with you from time to time. Eventually, you’ll show signs of improvement and better at thinking critically about the markets, financial instruments, and pertinent economic news. Traders for the most part make great money since they’re intelligent, creative, and execute well under pressure. In the event that you don’t have those characteristics, you aren’t likely to prevail in any front office job, at least not on the public markets side. Not to mention that if you are given an interview for a front office position, you will be less than ill-prepared.
#2 The Word “Hedge-Fund” Appears On Your Resume
It only takes under 30 seconds for a recruiter to review a resume. In case you’re able to hand your resume directly to a recruiter, maybe that gets you 30 seconds. Besides, there are a significant number of candidates to be assessed for one position so anything related to the position (even remotely relevant) can help you stand out. Just by having the word “hedge fund” on your resume (or identifying the business you work for if you don’t work for a prominent fund) or industry-specific jargon, you can pass this initial screening. Always dress for the job that you want, not the job that you have.  For this situation, “dressing” your resume up to feature how your back office skills are significant for the front office job you’re applying for is critical.
#3 Don’t Underestimate Your Support Staff Background
In a hedge fund environment, all positions have to work cooperatively and each part of the fund can offer significant insight into understanding trade value, trade positions, and general trade strategy. Even if you are in “back office” position, you may still be able to involve directly in trading activities of your fund. So the more proficient you are in the support area that you work in, the easier it will be to create strong relationships with members of the portfolio management team, trading team, and other “front office” staff. Unlike in investment banking environment, it’s not too much to wander over and talk with the “front office” staff as most hedge funds are small. In Hedge Fund environment, traders and analysts are more likely to at least partially understand the importance of your role.
And here is some additional advice for you to break into front office:
#1 Be well-prepared
You can’t succeed without preparation, and if you want to get your dream job, you’re going to need a lot of preparation. Don’t be upset when you take in a “back office” position. As mentioned previously, it is not the end of the world, in fact, it may be the first step to finally get what you want while the “back office” position gives you spare time to work on you plan as the job is not so intense. Furthermore, there are chances for you to:
  • Expand your professional network
  • Get a professional analyst designation
  • Explore other roles that move you closer to the front office
If you’re ambitious, you won’t want to stay in “normal job” land forever… but if you’re already there, take full advantage of the benefits before you move to another level of your plan. Your move to the front office won’t happen after 1 or 2 days, but with a well-prepared approach it can happen eventually.
#2 Find somebody that have been in your shoes before!
Seek for guidance, you don’t have to figure the way out alone. There’s an absolute chance that someone in a “front office” role at your fund did what you are trying to do right now. Even though no two journeys are alike, you should take similar steps to ensure similar results. Go and find someone in the front office who worked elsewhere before, and find out how they advanced:
  • Did they rotate support roles?
  • Did they have a mentor?
  • Did they go back to business school to get an MBA?
  • Did they take the CFA exams?
All these inquiries will give you insight into the nature and culture of your fund, and whether or not you can move from “back office” to “front office”  at that particular fund. Sometimes the easier path to get out of “back office” is to simply move to another fund. 
You may want to figure this out early on so you don’t spend years in support roles!

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