Where's the hiring activity in hedge fund technology?

Faced with record redemptions and slumping performance fees, hedge funds have switched from being IT big spenders to technology scrooges. However, some are still hiring technology staff.

According to research firm Celent, hedge funds continue to invest in front office systems such as smart order routers and software to facilitate algorithmic trading. This is confirmed by rival research firm Tabb Group, which surveyed hedge funds earlier this year and found 40% are committed to improving front office systems.

Alistair Singleton, managing director of specialist IT in finance recruiter 7 Fifty Two Solutions, says he's seen very little hiring activity from the majority of hedge funds this year, but: "The driver for those that are recruiting is to develop a high-frequency or algorithmic trading system that is likely to give them a competitive advantage going forward."

Hedge funds are looking for developers with Java or C# skills in order to build high-frequency trading systems, says James Moore, manager, capital markets IT at Recruit Associates.

"They are, however, becoming a lot more stringent in their requirements," he says. "Specific business knowledge around the hedge fund sector, combined with very strong technical skills is a prerequisite."

Other areas of technology investment for hedge funds in 2009 will be risk analytics, risk monitoring and control, legal and compliance, risk reporting, pricing and valuation, collateral management, liquidity risk management, performance measurement and attribution, says Celent.