Yes, hedge fund managers can operate from their homes as long as their homes provide a professional backdrop for their practice. Some donkey years ago, following the 2008 global financial crisis, it would have been impossible or seem very out of place for investors of hedge funds to work from their homes solely with a Bloomberg Terminal.

However, with the COVID-19 giving managers no other option but to work from home, hedge fund managers and other financial firms have had to adapt accordingly and quickly to maintain investors trust. Clients also now understand that working from home is not a liability to their investments; rather what really matters is the managers’ ability to pivot effectively with respect to infrastructure, fundraising, and investment strategy.

A hedge fund manager is expected to be in charge of making investment decisions for a pool of capital commonly provided by investors that meet designated requirements for net worth or investment sophistication. Note that since a hedge fund manager is responsible for handling a portfolio of investments, his position is somewhat similar to that of a mutual fund or exchange-traded fund (ETF) manager and is always a very daunting and crucial one.

To work from home, a client would expect a hedge fund manager to live in a more affluent neighbourhood with a dedicated area for the home business as opposed to a poorly maintained apartment in a neglected area of town. Also, some business licenses will only allow one client to be at your home at one time.

Other issues hedge fund managers who want to work from home will have to consider include parking, access for handicapped persons, and restrooms. Additionally, a major factor in deciding whether to work from home as a hedge fund manager is whether your family is willing to share their home with your business.

Also note that the compensation range for successful managers who work at home will more or less mirror the compensation received by managers with similar practices who work anywhere else without the associated, and often high, overhead expenses.

10 Tips and Guidelines for Hedge Fund Managers Working From Home

Although there are unending tips and guidelines about best practices – security, hardware and software, communications – available for hedge fund managers, here are a few tips for these managers when working from home.

1. Use a VPN

It’s advisable you use a VPN whenever you’re connected to a network that you don’t control. That includes Wi-Fi at co-working spaces, cafes, libraries, and airports. Although some financial firms in the United States have their own VPNs that off-site employees need to access certain servers or websites that store information meant only for internal use. In those cases, you’ll also need to use a VPN at home.

Howbeit, it’s imperative to get into the habit of leaving your VPN connected as often as possible because it’s always safer to have it on than not. However, always remember that when you are connected to your firm’s VPN, others could see what you’re doing. So don’t view adult movies via your corporate VPN.

2. Staying by the Computer at All Times

Owing to the recent market volatility, for many hedge fund managers it has been normal for them to keep their eyes on the market. However, whether you are managing your own fund or you work as a junior analyst starting a career in alternative investments, it is imperative not to spend every minute in front of the computer.

Indeed, when working from home, hedge fund managers, just like all professionals, tend to feel pressure to be at their screens at all times to ‘prove’ that they are working. This is not productive. Same way as in the office, fund professionals are not expected to reply to every internal chat within seconds and it is not a competition to be the first to respond to that group email.

When in a dedicated home work area (ideally a desk that is only used for work), it is crucial to be focused and productive. Don’t just be at the screen to prove your presence. It is pertinent to take breaks as one would in the office and get into the habit of ensuring screen time is structured and efficient.

3. Working in your Pyjamas

Without doubts, everyone have fallen for this – when spending the day working from home there is nothing easier than doing the lazy thing and staying in your pyjamas. However, the issue is the lack of separation between personal time and work time. Note that by physically preparing for work, whether it be shaving, doing one’s hair or putting on semi professional work clothes, your mind is prepared and triggered to focus on the work tasks ahead.

4. Over communicate

Working from home more or less requires you to over communicate. It’s imperative you tell everyone who needs to know about your schedule and availability often. When you finish a project or important task, say so.

Have it in mind that over communicating doesn’t necessarily mean you have to write a five-paragraph essay to explain your every move, but it does mean repeating yourself. Joke about how you must have mentioned your upcoming vacation six times already, and then mention it again.

5. Working from the Couch or the Bed

According to reports, with a good portion of hedge fund managers living in close quarters in cities like New York City and San Francisco, many do not have the luxury of a home office or separate room to work. Therefore, it’s important you become creative and find a quiet area to work. Working from the couch, or even the bed, should be avoided for two reasons.

First, it is pertinent for managers to understand that their work area and relaxation/home areas are separate.  When managers are at their home desk, their minds gears are meant to be focused on ‘work’ and when they are in non-work areas they want their mind to be thinking ‘rest/personal time.’ Second, as with working in pyjamas, it is challenging for the mind to shift gears into work mode if relaxing on the couch.

6. Show Up to Meetings and Be Heard

As a hedge fund manager, you will be expected to occasionally or more frequently take part in video conferences and conference calls, but it’s a good idea to attend optional meetings sometimes, too. Always be sure to speak up during the meeting so everyone knows you’re on the call. A simple, “Thanks, everyone” Bye!” at the close of a meeting will go a long way toward making your presence known.

7. Set Ground Rules With the People in Your Space

It’s also important you set ground rules with other people in your home or who share your space. For instance, if you have children who come home from school while you’re still working, they need clear rules about what they can and cannot do during that time.

In addition, just because you’re home and can let service people into the house or take care of pets doesn’t mean other family members should assume you will always do it. If that’s how you choose to divide up the domestic labour, that’s fine, but if you want take it all on by default because you’re home, you may feel taken advantage of, and your productivity may suffer.

8. Not Exercising

It’s not a new fact that exercising helps and boosts productivity. With gyms and boutique fitness studios being closed during this pandemic in many hedge fund centres, alternative investment professionals are naturally seeing a reduction on the number of daily ‘steps’ normally taken.

If you fail to consciously address the issue, it is only a matter of time before your overall health may begin to suffer. Howbeit, there are some things fund managers can do. Go for a walk, take the dog out, go for a run or a bike ride, and spend the first half of lunchtime doing yoga or a virtual exercise class. Aside from keeping daily activity levels up, it will also allow managers to focus and refresh the mind and work harder to generate more alpha.

9. Becoming too Isolated

Also note that most fund managers are facing their first extended period of working from home. These financial experts are more or less used to being around colleagues and communicating with their networks (both internally and externally).

It is hard transitioning from an office environment to a more isolated home environment. Isolation can become stifling quickly and affect both production and health. However, there are two easy ways to sort this out. First, it is very imperative to maintain contact with the colleagues you normally interact with on a daily basis (most fund managers have internal chat systems now; set up groups internally).

Second, for many financial experts, networking is a crucial part of the job. Arrange ‘virtual coffee’ meet ups, reach out and check how they are doing (organize a video call – this will also ensure you are not on the couch in your pyjamas.), check in with service providers and others in the industry.

10. Look for Training Opportunities

When you’re not in an office with your team, you might miss out on training and skills development courses that are taught in person. Your firm might even forget to involve you to its online training courses.

Most times, it can be tempting to see this as a dodged bullet, but you might be missing out on an opportunity to learn something useful. Speak up and make sure you’re included. Aside from top-down training, you can request online or in-person courses, training, and coaching if you need it.

Conclusion

With the effects of the global pandemic, just like other sectors of the economy, the financial industry workforce has become increasingly mobile and working from home is now more common than ever. Experts also expect this trend is likely to continue well into the future.

However, it’s imperative as a hedge fund manager to understand the difference between work time and personal time. Mistaking both can affect productivity and limit the number of alphas you generate and maintain.