Hedge Fund Accountant Career Guide

Hedge fund accountants provide accounting services and performance analysis to hedge funds or mutual funds. These professionals prepare financial statements, maintain general ledgers, calculate net asset value, and take on other accounting and recordkeeping responsibilities.

Hedge fund accountants work closely with portfolio managers to develop investment strategies and improve various operations of the hedge fund. They also trade products and securities dealing with offshore hedge funds. Hedge fund accounting entails handling the payments of hedge fund fees and expenses and providing reports for fund managers and investors.

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The typical hedge fund accountant job description includes accounting and recordkeeping responsibilities related to hedge funds and their cash flows. These professionals work closely with investors, investment managers, tax professionals, and investment advisors to manage funds effectively.

Hedge fund accountants determine a hedge fund’s investment potential, monitoring and analyzing the fund’s transactions. Paying fund fees, collecting data for tax compliance, and preparing financial statements also fall within these accountants’ responsibilities.

Hedge fund accountants also complete the following tasks:

Hedge fund accounting specialties allow accountants to tailor their skills to specific investor needs. The following list includes four specialties hedge fund accountants might choose, plus common job titles associated with each specialty.

Hedge fund accountants may work with small businesses or startups interested in growing through investments. These professionals typically pursue a bachelor’s or master’s degree in business administration with an accounting concentration. Students earning these degrees typically learn business-focused financing and growth strategies, along with accounting fundamentals and advanced principles.

Hedge fund accountants who specialize in business may begin as CPAs or staff accountants, eventually transitioning to advanced roles like financial advisor or senior fund accountant.

Hedge fund accountants typically possess tax knowledge as it applies to hedge funds, since tax compliance is an important part of investing. In large corporations, these accountants usually prepare reports for and consult with tax compliance officers or tax accountants in large corporations. Smaller organizations may combine the hedge fund and tax accountant roles.

Tax accounting specialists begin their careers with a bachelor’s degree in accounting. They may pursue a certified tax preparer certification.

Entry-level roles for hedge fund accountants with tax expertise include tax accountant, tax auditor, and CPA. More experienced accountants can move into senior fund accountant positions. These professionals oversee several elements of hedge fund accounting, including tax filing and compliance.

Hedge fund professionals experienced in data analysis monitor and audit hedge funds for fraud, errors, and discrepancies. This specialization can help clients ensure they are investing in the best hedge funds for their goals.

To gain foundational knowledge of data and fraud analysis and investigative reporting, these accountants may complete a bachelor’s degree in forensic accounting. They may also seek designation as a certified fraud examiner (CFE) or certified internal auditor (CIA), usually after becoming a certified public accountant. CFE and CIA credentials can lead to advanced positions in business, government, or law.

These accountants may work with one organization or contract with multiple agencies to provide services.

Hedge fund accounting relies on compliance to ensure safe, healthy investments for clients. Accountants with fraud investigation experience understand investment and tax laws and relay compliance issues to investors.

This specialization’s skill set overlaps with that of data analysts. Reporting specialists may follow a similar career pathway, completing a forensic accounting degree before becoming a CPA, CIA, or CFE. In addition, a master’s in forensic accounting may lead to senior-level roles overseeing tax, compliance, data and reporting, or consulting departments.

Hedge fund accountants begin their careers in a similar way to other accountants. They first pursue a bachelor’s degree in accounting or business administration with an accounting concentration. They may then earn a master’s degree in accounting, which teaches advanced accounting strategies and can boost a graduate’s job prospects.

Many hedge fund accountants obtain CPA certification and licensure, with requirements varying by state. Most states require at least 150 credits, 1-2 years of professional experience, and a four-part exam for CPA licensure. Hedge fund accounting professionals must become licensed if their job requires them to file reports with the Securities and Exchange Commission.

Accountants can choose from an array of specialty accounting skills, and the Bureau of Labor Statistics (BLS) projects the accounting field to grow by 7% from 2020-2030. Hedge fund specialists may see particularly strong job growth as new laws and restrictions call for fresh methods for banking and investing. Hedge fund experts are necessary to decipher these changing terms in the financial world.

As of 2020, one-quarter of all accountants and auditors worked in tax preparation, bookkeeping, and payroll services, according to the BLS. Candidates with advanced education, experience, and credentials stand the best chance at top jobs in these areas.