Portfolio Manager Vs. Hedge Fund Manager

Dec 12, 2017

The main distinction between portfolio managers and hedge fund managers is the nature of the investments on which they concentrate. Hedge fund managers also typically earn higher salaries. Read on to learn more about how these careers compare.

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Comparing Portfolio Managers to Hedge Fund Managers

Portfolio managers and hedge fund managers are both in the business of guiding clients in making money. While many aspects of their work are similar, they focus on different types of investments.

Job Title Educational Requirements Median Salary (2017)* Job Outlook (2016-2026)**
Portfolio Managers Bachelor's degree $84,635 11% (financial analysts)
Hedge Fund Managers Bachelor's degree $117,916 11% (financial analysts)

Sources: *PayScale.com; **U.S. Bureau of Labor Statistics

Responsibilities of Portfolio Managers vs. Hedge Fund Managers

Portfolio managers and hedge fund managers both meet with current and prospective clients. Portfolio managers review reports that provide relevant data that's used to make investment decisions and meet with the analysts and professionals who gather that information. Once they've considered the data available they make investment decisions. Hedge fund managers make decisions about investment opportunities as well, but they typically look for specific types of opportunities that can produce high profits. They may monitor business news and track potential mergers or other business developments that may signal an opportunity to make significant gains. As hedge fund managers, they must create business strategies and spend part of their time selling their services to potential investors.

Portfolio Managers

Since this is a position that other financial analysts work towards, portfolio managers must be highly trained and have practical experience in their field. Portfolio managers should have a bachelor's degree in a relevant field, such as economics, and some advanced positions may require a master's degree; it is also common for aspiring portfolio managers to earn the Chartered Financial Analyst (CFA) credential. They need good decision-making skills and analytical skills to perform their duties effectively. They work in an office environment but may travel at times to see clients. It's common for portfolio managers to work overtime.

Job responsibilities of a portfolio manager include:

  • Reviewing client objectives
  • Monitoring markets
  • Having staff buy or sell investments
  • Meeting with colleagues

Hedge Fund Managers

Hedge funds involve large amounts of money and raised risks. Hedge fund managers seek to produce high profits for their clients. While they perform many of their tasks in an office, they may also meet with clients in person, which can involve travel. Since hedge funds are not regulated as strictly as other types of investments, it's common for hedge fund managers to need a plan for managing risks. They should have good interpersonal skills so that they can effectively communicate with staff and clients. They need a bachelor's degree and several years of practical experience as a financial analyst to advance to a role as a manager. A master's degree in business administration or a similar discipline may also be preferred by some employers.

Job responsibilities of a hedge fund manager include:

  • Reviewing client qualifications
  • Evaluating investment opportunities.
  • Determining the best way to invest money
  • Producing a sales plan

Related Careers

Portfolio managers and hedge fund managers both invest money and need comparable skills. Individuals considering either career may also be interested in other occupations that involve investing, such as becoming an investment banker or an investment manager.

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