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Ask Gita Rao, a fund management industry veteran, what it takes to be successful in asset management today and she will recite a number of key attributes.
“It takes an incredible focus. You have to be very decisive [and] you have to be an independent thinker, but you also have to be able to work well with others and collaborate effectively,” says Ms Rao, who is the founder and president of Aspari Capital, a consultancy focused on quantitative research and portfolio strategies, and the faculty director of the Master of Finance programme at the MIT Sloan School.
As the asset management industry has grown in complexity, hiring managers in the investment industry have a growing appreciation for a job candidate’s less tangible skills, says Ms Rao. Of course, hiring managers still seek certain credentials that demonstrate a potential hire’s financial facility and analytical ability — “but employers also want to see evidence of humility — that you know the limits of what you know, and that you’re not one to confuse luck with skill”, she says.
This is not to say that certifications and graduate degrees do not matter. On the contrary, says Mitch Ackles, president of the Hedge Fund Association. “The job market is more competitive than it’s ever been and you have to find that edge,” he says. “The edge is often your designation.”
For asset managers, the chartered financial analyst (CFA) credential is a gold standard. The CFA requires a minimum of four years’ prior work experience and comprises three individual exams that focus on investment tools, concepts, and wealth planning. Each level of the exams increases in complexity and difficulty. Hiring managers at hedge funds look for candidates who hold the global chartered alternative investment analyst (CAIA) credential. This qualification involves two exams. The first assesses a student’s understanding of alternative asset classes and knowledge of the techniques used to evaluate the risk-return attributes of each one. Level two evaluates how well a student applies that knowledge.
Another qualification, the certified financial planner (CFP), varies country to country. The CFP certification is for investment professionals who advise individual clients in areas such as retirement plans, insurance, and income tax.
Risk management certifications are also increasingly popular. The Global Association of Risk Professionals (GARP) and the Professional Risk Managers’ International Association (PRMIA) are two trade associations that offer certification tests. Known as the financial risk manager and professional risk manager respectively, the qualifications show students’ understanding of financial markets, the mathematical basis for risk management, and risk management techniques.
Certain graduate degrees, in particular a masters in finance, are also sought after by employers, says Mr Ackles. “A masters in finance is extremely useful in this industry,” he says. “Firms need number crunchers. When hiring managers come across a graduate of this kind of specialised finance programme, they know that person has studied this material in-depth and can hit the ground running.”
Employers also want candidates who are familiar with technology and computers, he says. “We are at a stage where the more tech savvy you are, the more valuable you are to a fund.”
This is why an educational background in maths, computer science, engineering and economics — even at the undergraduate level — is helpful, according to Ron D’Vari, chief executive of New York-based advisory firm NewOak Capital and a former BlackRock managing director. “It’s a world of data,” he says. “We want to see that you can work with data, manipulate it, and make data-driven decisions.”
Mr D’Vari tends to look favourably on masters-level business programmes, but he is quick to advise students to make sure they obtain internship experience, too. “Sometimes students come in with too much of an academic perspective and not enough practical understanding of the industry,” he says.
MIT Sloan’s year-long programme targets students with little or no prior work experience. In July, however, the school will pilot an 18-month programme that gives students time to do an internship.
Ms Rao also urges her students to round out their financial education with courses on organisational behaviour because, as she points out, as they progress in their careers and take on more management and supervisory responsibility, “the organisational issues become really important. I promise them that 10 years later they will look back and think it was the most useful course they took.”