How to make it in hedge fund IT

"The largest funds are building their own infrastructure support teams," says Alistair Singleton, a recruiter at 7 Fifty Two Solutions, "At the moment it is just the tip of the iceberg, but we expect more of it as funds get bigger."

Infrastructure support is not the only area of hedge fund hiring activity. James Baker, a consultant at Huxley Finance, says funds are equally interested in recruiting high calibre systems developers to customise their off-the-shelf trading systems. Their may well rise in future: a recent report by the Tabb Group, a US financial services think- thank, says in-house technologies are set to become an increasingly important source of competitive advantage for large hedge funds.

Breaking in is hard to do

If you're an IT professional who fancies the idea of cutting loose from a big institution and setting up shop with some maverick hedge fund owners, there are a few things you will need to know first. They are: it doesn't happen very often; you will need to be very good; and if you are lucky enough to succeed, you will have to do everything yourself.

Even as hedge funds add to their IT teams, recruiters stress the numbers involved are limited. A large hedge fund, employing the grand total of 60 staff will typically have no more than a handful of people in its IT department, says Singleton.

The diminutive size of technology teams gives funds the option to be choosy. Roles in hedge funds are typically related to infrastructure support, or systems development. In both cases, funds have a very precise shopping list.

Skills required

When it comes to hiring IT developers, James Baker says hedge funds go for very talented, experienced individuals, typically holding an MSc or PhD in a quantitative subject. He says, "Hedge funds tend to prefer candidates with three to four years experience developing front office trading systems for bulge bracket banks, such as Goldman Sachs or Morgan Stanley "

Singleton says hedge funds tend to like people from rapid application development (RAD) teams in investment banks: "They are interested in relatively unique people that have been responsible for the business facing aspects of systems development. The people they favour will tend to have been quite prominent: you can't decide to move to a hedge fund if you're just another person in a team of 20."

In infrastructure and support roles, Baker says funds favour people with strong business knowledge and all round delivery experience. Singleton says candidates need wide exposure across different technologies: "Hedge funds tend to have a wish list that includes familiarity with every version of windows, knowledge of every firewall, networking issues and protocols like Cisco, familiarity with virtual networks used in remote working, and the ability to adapt technology to new locations."

Doing it all

Because they don't have many IT staff, hedge funds need all-rounders. If you work as a programmer in a bank you might be part of the RAD team, a quant developer, or a C++ and Java specialist. In a hedge fund, you'll need to be all these things and more.

"What you tend to find are people who can customize stuff, as well as liaise with the front office, and do some VBA database work occasionally," says Baker.

The same goes for infrastructure roles. Because infrastructure specialists in hedge funds cover the entire range of potential infrastructure issues, recruiters say they are rarely pulled from investment banks. "People at banks tend to be pigeon-holed into a particular infrastructure area," says Singleton. "Hedge funds prefer people from small trading companies, who have experience across a range of fields."

Show me the money

If you want to make a fortune in hedge funds, becoming an infrastructure support person may not be the way to do it.

Baker says pay for support roles tends to be relatively modest: salaries rarely exceed 80,000 and bonuses rarely exceed 20%.

By comparison, developers who move into hedge funds can expect to be handsomely rewarded. Baker says funds offer reasonable increases on base salary, plus bonuses of 100% or more and the possibility of stock options.

Joining a developer

If you don't join a hedge fund, you could always join a developer that works for hedge funds.

Beauchamp Financial Technology expects to recruit around 60 people this year. Roger Walker, head of human resources at the company which employs only 120 people in total, says growth is 'exponential.'

Around 85% of Beauchamp's hires come straight from university, says Walker, but a few have investment banking backgrounds. He says all technologists at the firm need to be familiar with Structured Query Language (SQL).

Links:

https://www.752solutions.com/

https://www.huxleyfinance.com/

https://www.bftl.com/