Here's why a top hedge fund recruiter says graduates should think twice about going into the industry

  • Adam Zoia, a Wall Street recruiting veteran, tells Business Insider that young graduates shouldn't get into the hedge fund business to make a quick buck.

  • You've got to be genuinely "obsessed" with investing to make a successful career in the industry, he said.

  • "A lot of people went into it for the wrong reasons for many years, it was all about making money," Zoia said.

Young graduates seeking jobs at hedge funds should think twice about joining the industry, unless they are genuinely "obsessed" with investing, a top Wall Street recruiter told Business Insider.

Adam Zoia, a Wall Street recruiting veteran — who recently launched CompIQ, which allows financial companies to compare how their pay and employment practices compare with their competitors — said young Wall Streeters should pursue a career because of a passion for investing, rather than as a quick cash grab.

"A lot of people went into it for the wrong reasons for many years, it was all about making money," Zoia, who previously founded Glocap Search, a recruitment firm for Wall Street, said.

Unless you're constantly "thinking about what stock to buy," and "looking at the stock market every day," Zoia says, maybe the hedge fund sector is not for you.

But if you truly love the markets, then the fund industry "would be a good career choice because you're going to be aligning a sort of natural inclination with business."

Without that inclination for the markets, Zoia said, there is a lot less to attract young professionals to the industry, because the rewards are simply not as big as they once were.

Hedge funds in the past have had a reputation for paying astronomical salaries to their staff, with frequent tales of fund managers earning seven figures. Now, however, Zoia says the industry's maturity means that mega pay days are more difficult to come by, especially if you end up working for a more established investment fund, rather than a new hedge fund.

"If you're chasing the money," Zoia said, the investment management industry is "probably not the best, you kind of missed the boat," he said.

Zoia said the choices for graduates are basically two-fold: join a startup hedge fund that is not established and has the potential to grow rapidly, but also risks failure, or join a more established player where you're safer in your job, but have fewer opportunities to make the really big bucks.

"If you are going to join, you are going to join a more mature one. If you are joining a more mature one the upside is more limited. So that means you better like what you are doing," he concluded.

Despite Zoia's warnings, a CompIQ report showed that overall compensation in hedge funds rose about 4% on average last year. Performance at hedge funds will still drive compensation, "potentially even more so in the past, as senior folks take more exposure in funds, align with LP expectations, and battle increased pressure on fees," the report said.

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