What is a Hedge Fund Analyst?

//What is a Hedge Fund Analyst?
What is a Hedge Fund Analyst? 2017-10-04T22:37:21+00:00

Definition: A hedge fund analyst works closely with a fund manager, providing all the research and analytical tasks to identify investment opportunities for a fund’s investment portfolio.

What Does Hedge Fund Analyst Mean?

What is the definition of hedge fund analyst? A hedge fundanalyst is responsible for following the financial news and assessing the trends of the market. Usually, HFAs spend a large amount of time on the Internet reading reliable sources of news and collecting information that can prove valuable for the fund’s portfolios.

In addition, fund analysts suggest potential investments to the fund manager based on the analysis they perform, thereby recommending certain stocks or bonds. Once the investment is undertaken, and the fund manager chooses the suitable strategy, the analyst should monitor if the strategy is fruitful or if there is room for improvement.

Let’s look at an example.

Example

Peter is an analyst, who works at BlackRock Advisors. The company is a global HF, headquartered in New York, and Peter is responsible for identifying new investment opportunities after conducting the proper market research. He is specialized in the healthcare sector, and therefore, he is assigned with the task of identifying profitable investments in the healthcare industry.

Every morning, Peter reads all the newspapers, and he visits prominent websites to be up to date with the news of the day. During the day, he assesses the performance of several healthcare companies relative to the market conditions, and he performs a valuation analysis to determine how each company is expected to perform in the coming quarters or years. If he identifies a company that he believes that it has the potential to outperform the market, he forms an investment thesis, which he presents to his fund manager.

Although he is very efficient in his work, Peter is still a junior fund analyst because he works only for two years at Blackrock. He just started to develop his own network of buy-side hedge fund analysts and to be engaged in senior level investment ideas. Next year, Peter will, hopefully, become a senior fund analyst with a demonstrated ability to generate own investment ideas.

Summary Definition

Define Hedge Fund Analysts: Hedge fund analyst means an employee who works at a HF researching investment opportunities.