Is a Masters in Applied Statistics  worth the time and money if one want's to make a career transition into Hedge Funds?

Your time would be better spent understanding a few standard algorithms used in trading. Using this knowledge as a platform, begin creating your own statistical trading algos in an 'R' based platform.  There are many freely available. Backtest the algo for a quarter or so.  Email the results to the managers of the funds where you wish to work and ask for a 'visit' to discuss your success. This will put you in a very small category of applicants who have used their intelligence autonomously, as opposed to rote memorization and regurgitation of pre-packaged information; some of which with precious little applicability to Hedge Fund quantitative measures.

At some point you have to turn all the letters at the end of your name into numbers. For quant funds, a PhD is helpful. But otherwise your credentials are fine-- you just need the work experience or to find an 'in'.

There are a lot of positions you can work one without the Applied statistics degree. I don't think it is worth the time and money at all, especially if you already have financial engineering for the derivative type of jobs. I could hardly think of a job that would require you to have that additional degree on top of what you already have. It all depends on the trading strategy that you are after, but by all means it would be much better to spend that time backtesting and improving the psychology of trading, you'd come out ahead.

Given that you already have a master's degree in a field quite related to applied statistics, there will be very little value added in additional study. You are much better off building something with your time. The problem is most master's degrees don't emphasize independent project work. If you wanted to spend more time in academia, it would be better spent working on a serious 6 month research project where you were expected to develop new methodology. The latter is worthwhile experience but not a course only master's degree.

No.  With two masters degrees already you are better off doing independent study and a lot of networking.  Too many degrees is a negative signal in finance since it makes you look too "academic" and "academic" is a bad thing in finance.  You are better off chatting with people at conferences than you are spending more time in a classroom.

I concur, I can't see the marginal increase in earnings being worth the time/money commitment to go for another degree.  I'd say, if numbers and quantitative finance are your thing, network your way into a hedge fund (or just use a recruiter) and in 2 years time, if you are certain you'll be in this arena for the long run, go for a PhD. Might be helpful if you post what type of hedge fund strategy you're attracted to, and why you went for the financial engineering degree (i.e. what made you gravitate towards that discipline).  While I am often slightly biased with questions like these, since I'm all for gaining work experience in place of certifications and degrees, I don't think this is a case of bias.  I think you are already in great shape in terms of academia, so now it's time to get your feet on the ground in the public markets to solidify your idea of a career shift.

I agree with the previous answers. Most of the hedge funds I've worked with either require a PhD or just a Bachelors, so unless the specific job you're after requires a Masters in Applied Statistics I would skip it and try to gain some job experience. Best of luck.

Get a cfa, best three letters I've ever gotten.  People actually take you seriously vs maybe some other three letters out there.  Surprisingly less so on the PE or RE side per my colleagues.