Renewed investment in hedge fund technology spells both more permanent and contract hiring in IT.
In a new report, data provider Datamonitor predicts hedge funds will spend $3.3 billion on IT by 2009 as the alternative asset class turns more mainstream and regulated. All that capital will need IT experts to implement the build-out. Much of the money will be spent in Europe and Asia, according to the Web site Silicon.com.
"We will definitely see more hiring," says Nii Barnor, financial services technology analyst at Datamonitor and author of the report.
"Depending on the size of the hedge fund, firms will be looking for permanent hires in front office support, such as execution and algorithms, as well as ops - an entire solution," he believes. "Smaller firms will outsource their tech to IT vendors but their back office operations to specialist providers."
Alistair Singleton, managing director of specialist IT recruitment firm 7 Fifty Two Solutions in London, says hedge funds with less than $4 - 6 billion in assets under management will typically continue to outsource their technology needs. "IT is very often considered an overhead," he says. "So, for most firms a packaged solution will suffice, and present the best lower - if not fixed - cost. But yes, the trend of larger hedge funds to build in-house IT teams should continue."
Typically the larger the firm, the more reliant it is on IT, and thus the more likely it is to invest in heavily tailored package solutions, Singleton says. In the short and medium terms, he sees infrastructure as being the most common area to be outsourced, relieving funds of the headaches of hardware and support issues while offering the highest availability.