The most important hedge fund hire

The people who assume this type of a "business manager" role tend to be given responsibility for some major projects during the pre-launch as well as later stages:

- Negotiating important contracts with employees and external service providers (fund custodian to auditors or banks), and managing relationships with all of these parties

- Designing and following a budget

- Renting office space and securing technology, office equipment and business staples

- Ensuring the fund assets and investments are accounted for by engaging accountants and tax professionals internally and externally

- Assisting the portfolio research team with any trading or investment related projects that require a business manager's involvement (for example, a unique investment that may not be easy to value or store)

Given these projects can have a major impact on the success of a business, why not institutionalize this particular role at hedge funds and look for talent in a more methodical way?   

In my view, those firms that hire the best talent for this particular "business manager" role are likely to make it a lot farther than those firms that cut corners by not hiring a dedicated business manager or hiring someone not well trained to do the required work.

For example, look for a skilled CFO who can think strategically about different firm projects, from recruiting to finances to fundraising.  This person will likely be a great addition to the team and step up and act as a business manager.   Avoid hiring old friends or family whom you think you trust, respect and like.  Any relationship can turn sour quickly; it is more important to hire someone whom you don't know well, but whom everyone else respects enormously and speaks highly of.  Finally, do not hire someone who may have managed a team but never had exposure to hedge funds.  The hedge fund business has very unique needs and not everyone can adapt to its high pressure, high speed--thus truly demanding--nature.