Hedge funds need IT pros to comply

Hedge funds are expected to double their spending on compliance systems over the next four years, creating new job opportunities for IT professionals.

"We are hearing a lot about compliance, well beyond MiFID and Sarbanes-Oxley," says Paul Bennie, a senior analyst with recruiter Astbury Marsden. "People are looking at the whole issue of risk compliance."

US-based researcher Celent predicts annual spending on compliance systems in the hedge fund sector will grow from US$41m today to almost US$80m by 2011.

As funds need to demonstrate that their processes comply with an increasing number of rules and regulations, demand for technology solutions will grow steadily, says Isabella Fonseca, a senior analyst with Celent. "We're definitely seeing increased interest in compliance solutions across hedge funds and wealth management," Fonseca says. "It's an issue for all financial services firms, but especially those with a significant retail business component."

If you're interested in working in compliance in a technical role, you'll need back-office experience and knowledge of one of the key compliance system product families: trade compliance, operational risk compliance or wealth management compliance.

These systems are automated tools that track various aspects of compliance, such as how closely investments match business objectives, or whether gifts to clients breach the regulations, says Fonseca.

According to Celent, the top five compliance systems being implemented by hedge funds today are Actimize, SunGard, Turbo Compliance, TerraNua and Compliance11.

If you don't have expertise in these products, there are still opportunities for business analysts who have worked on previous compliance projects, says Bennie. "Lots of these roles aren't technical at all," he says. "Firms want IT people who can look at a rule book, check that against existing systems, and draw up a plan that translates the rule book into technology processes."