With the increasing complexity of the financial market, alternative investments careers have become a popular choice for finance professionals. This article will elaborate on the industry background, core work requirements, salary levels, necessary skills and qualifications, as well as tips for getting into the industry. There will be multiple mentions of keywords like ‘alternative investments careers’ and ‘investments’ naturally.
Industry background of alternative investments
The context articles provide insights into alternative investments at top business schools. As mentioned, alternative investments refer to assets outside of traditional asset classes like stocks, bonds and cash. They include hedge funds, private equity, venture capital, real estate, infrastructure, commodities, derivatives contracts etc. The alternative investments industry has seen explosive growth in the past decade, with assets hitting $13 trillion in 2020 globally. Investors are attracted to alternative investments for diversification and higher returns. However, alternatives are more complex, illiquid and risky than traditional investments. They require specialized expertise in areas like portfolio construction, risk management, due diligence and valuation.
Core work requirements in alternative investments
Professionals in alternative investments take on a variety of roles. Portfolio managers construct portfolios of alternatives and manage them to achieve client objectives. Research analysts research and evaluate potential investments through financial modeling and due diligence. Traders execute investments and manage positions. Risk managers measure and manage portfolio risks. Other common positions include investment associates, client services, product specialists etc. The day-to-day work involves analyzing deals, managing portfolios, implementing investment strategies, monitoring positions, reporting performance etc. Strong financial modeling, valuation and data analysis skills are critical. Professionals also need to handle pressure, think creatively and communicate effectively with stakeholders.
Salary levels in alternative investment careers
Salaries in alternative investments are among the highest in finance. According to eFinancialCareers, base compensation for junior roles like analysts and associates at top firms starts from $100k to $150k. More experienced portfolio managers and traders earn $200k to $500k or more, with bonuses exceeding base pay. The high compensation reflects the complexity of work and profitability of the industry. Salaries also differ significantly by firm size and prestige – bulge bracket banks and megafunds pay considerably more than smaller boutiques. Geographic location, investment strategy and product focus can also impact pay levels.
Necessary skills and qualifications for alternative investment professionals
The key qualifications sought by alternative investment employers include relevant academic credentials, internship experience, technical skills and cultural fit. A degree in finance, economics, accounting, mathematics or statistics is generally required. Many firms favor higher degrees like MBAs. Internships at investment banks, hedge funds, or PE/VC firms provide valuable experience. Required technical skills cover financial modeling, valuation, portfolio management, data analysis using Python or R, and SQL. Soft skills like communication, creativity, ethics and teamwork are also crucial. Cultural fit matters since alternative investment teams are small and collaborative. Candidates need intellectual curiosity, attention to detail, entrepreneurial drive and passion for markets.
Application tips for alternative investment careers
The competitive nature of the industry makes standing out in applications essential. Academically strong candidates should highlight achievements like standardized test scores, GPA, merit awards, and finance-related coursework. Demonstrating domain knowledge through stock pitch competitions, investment club leadership or self-study is also beneficial. The ideal internship mix blends major financial institutions like banks with a smaller alternative investment firm. Fitness for firm culture should come through in essays and interviews via stories showcasing collaboration, ethical behavior, intellectual curiosity etc. Financial modeling skills can be evidenced through online courses and modeling tests.
In summary, alternative investment careers offer the appeal of working with complex assets and strategies alongside outstanding pay. however, the technical expertise and soft skills required are demanding. Solid credentials, internships, financial modeling skills and cultural fit are key to entry. Diligence, creativity and collaboration are prerequisites for success.