Hiring squeeze on hedge fund software houses

With hedge funds prepared to pay top dollar for talented technologists, software houses are being left in the cold.

US hedge fund software company Paladyne is among those finding it hard to attract staff for its London-based expansion into Europe.

"We're facing some very tough challenges," Paladyne CEO Sameer Shalaby says. "We're competing with hedge funds who are overpaying for exactly the same sort of staff we're looking for."

Those staff, he explains, combine experience of buy-side institutions with knowledge of technologies such as MS SQL 2000. "We may not be able to offer the same bonuses as hedge funds, but, as a software house, we can offer stock options," says Shalaby, whose company offers an integrated technology platform supporting front to back-office hedge fund operations on a local or hosted ASP basis.

Some recruiters, however, think software houses can't really compete, and not just because of remuneration. "Hedge funds often like to recruit from the bottom up, bringing in good PhDs and moulding them to their way of working," says Alistair Singleton, a recruiter at 7 Fifty Two Solutions.

A recruit at this level, he says, could expect to receive in the region of 35k to 45k. Bonuses in the sector are in multiples of one to three times salary. But Singleton warns that hedge funds tend to regard IT staff as overheads rather than contributors to the bottom line - so bonuses are not always forthcoming.