The increasing lure of the buy-side for sell-side techies

Compared to investment banks, fund managers haven't traditionally been particularly sophisticated users of technology, but this is changing. As a result, the buy-side is increasingly looking to tap the IT expertise of the sell-side.

The buy-side in Europe is likely to invest heavily in trading technology, such as smart order routing, in a bid to capitalise on the more fragmented equity markets in the post-MiFID environment, reckons Axel Pierron, senior vice president at Celent.

"There's a real opportunity for people working on the sell-side to move to the buy-side as its technology requirements get more sophisticated," he says.

Of course, this implies that technologists will actually want to make the shift across, and one stumbling block is the pay differentials. Oliver Hinchliffe, team leader in the IT division of recruiters Project Partners, says a core developer can earn between 70-100k at an investment bank, compared to 65-80k within a fund manager.

"Generally speaking, there's not a huge migration from the sell-side to the buy-side," he says. "However, we've seen roles where fund managers are developing bespoke middle office applications, and platforms to support quant trading - in both instances candidates with an investment banking background were hired."

Salaries are often the biggest hurdle for fund managers to leap over when considering hiring sell-side techies, suggests Nick Finlay, asset management consultant at Hays Financial Technology. He says that increasingly, buy-side firms are looking at the cheaper option of recruiting developers from a non-finance background, who have experience working on "high transactional systems".

Nonetheless, he adds: "There's still a shortage of C# developers with front office experience and financial product knowledge. As a result, fund managers are considering people from both the buy-side and sell-side."