Top Jobs That Require Financial Modeling Knowledge

Hedge Funds

Hedge funds manage pools of money on behalf of investors and buy or sell short marketable securities such as stocks. For typical long-short hedge funds that make bets on whether a stock will go up or down, there is a strong emphasis on fundamental analysis. Fundamental analysis involves a thorough understanding of both the qualitative and quantitative aspects of a company’s performance.

To understand the quantitative side of a company’s performance, analysts will typically build forecast models including a DCF. They may also use comparables analysis (described earlier in this article). For this reason, it is common for long-short hedge funds to hire analysts from equity research or investment banking backgrounds.