| Hedge funds are providing research analysts with | | | | catcher or a pitcher." |
| new career paths, though their role varies hugely | | | | In a "typical long-short equity, fundamentally |
| from fund to fund. "A lot of funds are set up in | | | | based hedge fund - a place like Viking," Arian |
| such a way that analysts are responsible for | | | | says, analysts support the portfolio manager by |
| telling the traders what to buy or sell up to a | | | | developing ideas or conducting company- or |
| certain dollar amount," explains an executive at a | | | | sector-specific research to find "relative value |
| Connecticut hedge fund who did not want to be | | | | plays in an industry." Typically, portfolio managers |
| named. This particular fund has industry analysts, | | | | evaluate ideas from several analysts in deciding |
| "such as a health care analyst who specializes in | | | | how to invest the capital they have on-hand.fund |
| health care companies and makes | | | | investing in credit-sensitive mortgage-backed |
| recommendations which could be on a company, | | | | securities would have at least one analyst going |
| an index, or some kind of basket trade," as well | | | | through data to predict how different types of |
| as generalists who might be asked by portfolio | | | | bonds would behave under certain changes in |
| managers to research a trading idea or a specific | | | | interest rates and credit spreads. |
| company. | | | | Arian says hedge fund analysts earn at least |
| Other analysts develop ideas on their own, then | | | | $100,000 a year. Their pay can rise reach several |
| present them to the portfolio manager to explore | | | | million dollars annually. |
| why a company should be included in the portfolio | | | | Working on the buy side, analysts have to be |
| as either a long or short position. | | | | comfortable with the fact their firm is investing in |
| "Hedge fund analyst" is a broad term, notes Peter | | | | their recommendations, observers say. "The |
| Arian, managing director of Analytic Recruiting in | | | | typical sell side researcher never has to put his |
| New York. "It's like asking what a baseball player | | | | money where his mouth is," Arian says. |
| does - the answer depends on whether he is a | | | | |