Investment Bank Or Hedge Fund?

You’ve worked your way up the ladder in the financial industry, and you’re looking to your future. There are many doors that have opened up for you, and they all lead in different directions: some to hedge funds, and some to investment banking. Which do you choose?

Prompt 1

While both career choices are paths to a rewarding career and the potential to make a very hefty amount of money, the two choices are quite different. Choosing investment banking means a steadier, more consistent job and salary. The pay starts out well and will grow even better with time served, and the chances of failure and ruin are much less present than in the more dramatic, volatile world of hedge funds. But it also means longer hours and working your way up the corporate ladder at a slower, more deliberate pace.  For the expert money manager who is comfortable riding out the market and letting long hours pay off in time, investment banking is the smarter choice.

Hedge funds, on the other hand, are for those with much more of a taste for the dramatic. The pay starts lower and the chance for failure is higher, but success means bigger sums of money in your bank account than even the hefty salary pulled in by senior investment bankers. If investment banking is poker, designed for the crafty strategist who plots hand by hand to slowly collect the most chips, then hedge funds are for craps players who don’t blink when it comes time to predict how the next dice roll will fall.

It may be slightly inaccurate to say that hedge fund management is all a guessing game, but working at one does require much more of the gambling spirit than investment banking. Like the world of gambling, hedge funds operate on a very simple principle: win and rake in the winnings, or guess wrong and get shown the door. If the pressure of potentially losing it all on one bad decision sounds like even more stress and sleepless nights than you already have, hedge funds are not the place for you.

There are other factors to consider as well, namely that once you pick one trying to change course later can be incredibly difficult. Many hedge funds obviously look for investment banking experience in their top personnel, but success in hedge funds is much harder to leverage into a career back into investment banking. Indeed, experience in investment banking can lead to opportunities all over the financial industry, whilst the specialized nature of working at a hedge fund gives you experience that only competitive funds are likely to be looking for. As is the nature of the career itself, moving in to hedge funds is a gamble that limits your options, but will pay off the most handsomely if you are successful.

Coming to a decision as big as what the future of your career at the top of the financial industry will look like is one that you need to be well informed on to make. Red Unida is an incredibly valuable resource designed to provide you with as much knowledge as possible on job openings throughout the financial industry. Whether you are still pondering the choice or already know which door you will take, the hundreds of top job listings on Red Unida will help you get to where you’re going.

Top 15 FS Salaries Red Unida April 2014

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Joining Red Unida is free, and gives you access to carefully collected data from across the industry and brought together to help you make the right financial industry career decisions. Sign up today

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