Hedge Fund "Infrastructure" Roles

Based on the most helpful WSO content, hedge fund infrastructure roles like Business Development (BD), Execution, Operations (Ops), and Finance are generally classified as middle or back-office roles. Here's a breakdown of these roles and some insights:

1. Business Development (BD):

   • Nature of Work: Focuses on sourcing capital, managing investor relations, and building relationships with potential and existing investors.
   • Progression: Can lead to senior roles like Director or MD of Business Development. However, it may pigeonhole you into sales-oriented roles.
   • Pay: Compensation can be lucrative, especially if tied to fund performance or capital raised.

2. Execution:

   • Nature of Work: Involves supporting the investment team in deal execution, ensuring smooth transaction processes, and coordinating with other teams.
   • Progression: Often leads to specialized roles within the fund or transitions to front-office positions depending on the fund's structure.
   • Pay: Typically lower than front-office roles but competitive within the middle-office spectrum.

3. Operations (Ops):

   • Nature of Work: Handles trade settlements, reconciliations, and ensuring operational efficiency.
   • Progression: Can lead to senior operational roles or transitions into risk management or compliance.
   • Pay: Generally lower than BD or Execution roles but offers stability.

4. Finance:

   • Nature of Work: Includes fund accounting, financial reporting, and managing the fund's liquidity and capital.
   • Progression: Can lead to CFO or senior finance roles within the fund.
   • Pay: Competitive within the back-office domain, with potential for bonuses tied to fund performance.

Trends:
Big funds are indeed scaling these roles rapidly, often due to increased regulatory requirements, operational complexity, and the need for robust investor relations. While these roles are not directly revenue-generating, they are critical for the fund's overall success and scalability.

If you're considering these roles, keep in mind that while they may not have the same prestige as front-office positions, they offer stability, work-life balance, and opportunities for growth within their respective domains.

Sources: The rise of business development roles in the industry, Intro to Investment Banking, Credit Hedge Fund opportunities, What are the different career areas of wallstreet?, Finance Career Path & List