The U.S. Department of Labor classifies risk managers under the general category of “financial managers.” It predicts that employment for financial managers who work for firms that manage funds, trusts, and other financial vehicles will grow by 20.7 percent from 2023 through 2033, or much faster than the average for all careers.
One major trend affecting the hedge fund industry are the changing demographics of the average hedge fund investor—from high-net-worth individuals to institutional investors. This will make operating and funding a small- or medium-size hedge fund more difficult because institutional investors tend to lean toward investing with large well-known funds with the most assets under management. IBISWorld predicts that the majority of firms exiting the industry will have assets of less than $100 million, “and growth will come from new funds by industry leading managers. Other small funds will be forced to consolidate.” As the more well-known hedge funds get even larger, and institutional investors require more information on a firm’s risk management practices, look for demand for risk managers to increase.
One thing to keep in mind is that the hedge fund industry does not employ a large number of risk managers, so competition for these coveted, high-paying jobs will be extremely strong.