The importance of due diligence when working with third-party fund administrators has become a key adoption among hedge funds, funds of hedge funds, and liquid alternative hedge funds since the days of the Bernie Madoff scandal. This emphasis on due diligence has put a spotlight on fund administrators on the buy side throughout the financial services industry. As a result, an increasing number of fund administrators interested in taking their careers to the next level are pursuing opportunities to work in-house for hedge funds. If you’re looking to make a transition, now would be the best time.

Ryan Murphy, Managing Director of The Execu|Search Group’s Financial Services division, often coaches job seekers on the benefits of using a third-party fund administrator role as a stepping stone to develop both the technical and soft skills they need to make a smooth transition to a hedge fund. “The role of an external fund administrator has evolved significantly in recent years,” says Ryan. “Today you are not only verifying net asset values and trading positions, but also performing additional administrative and operational services, and providing compliance reporting to support both client and investor needs.” Third-party fund administrators are in a unique position as they usually work closest to the fund managers and as a result, get a glimpse into a hedge fund’s operational processes.

Third-party fund administrators interested in making a transition to work in-house for a hedge fund also have a competitive advantage over job seekers working in different financial institution roles. “Unlike working at a bank in operations, for example, working as a third-party fund administrator allows you to build a number of transferable skills that mirror how most hedge funds can run their operations,” notes Ryan. For example, managing the reconciliation process, interfacing with portfolio managers and investment professionals, or completing a variety of back office operational duties is the type of experience that will make you more marketable to hedge funds.

If you’re looking to get your foot in the door at a hedge fund, being a third-party administrator is one of the best ways to perfect the skills you need to stand out to hiring managers throughout your job search. “Hedge funds with the right fund administrator in place can save money and avoid costly mistakes that could cost them major profit, so possessing the right skills such as financial product knowledge is crucial,” says Ryan. “Hiring managers are in search of fund administrators that are willing to learn new concepts, systems, and processes to effectively manage a client’s confidential information.” The more you can emphasize how you’ve done this in the past, the better your chances are of being hired by a hedge fund.

Additionally, the more exposure you have to different asset classes (e.g., equities, futures, etc.), broadens the types of hedge funds you can pursue employment at. On top of the technical skills, fund administrators should possess a team player attitude, yet have the aptitude to work well independently. Finally, strong communication skills are a must as you should be able to articulate different investment strategies that will serve the client’s needs and help the business to grow.