Pedersen was the manager of various clubs in Northern Zealand before joining Nordsjælland as youth coach in 2006.[3] He later became Kasper Hjulmand's assistant in Nordsjælland and Mainz 05 and had a brief spell at Brentford in a backroom role and as B team head coach,[4][5] before returning to Nordsjælland as technical director.[6] In February 2019, it was announced that he would succeed Hjulmand as manager of Nordsjælland in the summer, but when Hjulmand left the club in March 2019, Pedersen was named manager immediately.[7]
On 7 January 2023, Nordsjælland confirmed that Pedersen had decided to step down from his head coach position, despite Nordsjælland being in first place in the Danish Superliga. However, Pedersen would continue as part of Nordsjælland's coaching staff for the remainder of the season, in addition to being the technical director of the Right to Dream Academy.[8]