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.”
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.
- Expand your professional network
- Get a professional analyst designation
- Explore other roles that move you closer to the front office
- 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?