Types

• Investment managers may prefer working for a large financial institution where thousands of investment professionals are employed. Another alternative is a boutique asset management firm, which is a smaller, more niche-focused firm where typically fewer people are employed. In a large financial institution, investment professionals have access to many resources, including the research muscle of the firm. In a more intimate setting that a boutique firm tends to provide, an investment manager might receive increased autonomy and can have more time for clients.
  
  

Mutual Funds

• Investment managers who want to focus primarily on buying stocks and bonds can be found at mutual funds. These firms traditionally go long on investments, meaning they bet that the investments being purchased will rise in value. Active managers buy and sell stocks as frequently as desired based on their own research or that of the firm. Passive managers create an investment portfolio that resembles a broad market index and strive to perform in line with that barometer.
  
  

Hedge Funds

• Hedge funds are lightly regulated investment funds that apply complex trading strategies to investing. Pursuing a career in hedge fund management often requires strong mathematical skills and an impressive resume. Hedge fund firms tend to hire Ivy League graduates and require an MBA or even a Ph.D., according to FIN Alternatives. Hedge fund managers are expected to generate profits that are higher than the rest of the financial markets.
  
  

Compensation

• Investment managers are often compensated on a management, performance and bonus model. Hedge funds are lightly regulated and fees vary but a typical model is a two percent management fee and a 20 percent performance fee. Performance fees can be waived with underperformance. Mutual fund managers earn a percentage of the total assets under management and a potential bonus based on investment performance. Mutual funds must outline fee structures in a regulatory filing known as a prospectus, according to the Investment Company Institute.