Why Sell-Side Tech Folks May Want to Work for an Asset Manager This Year
BlackRock is hiring tech pros to help build an internal trading system this year, which aims to strip out costs. If other asset management firms take the same route, this is likely to require development expertise from the investment banking sector.
There's no guarantee other firms will follow in BlackRock's footsteps - as the world's largest asset management company with a history of developing technology inhouse, it's in a fairly unique position.
However, according to the FT, its new trading platform will allow the firm to "cross trades internally between clients", which could essentially strip out the need to go through an investment bank for this service.
Although this platform is likely to be developed in the U.S., recruiters suggest that the fund manager is also hiring in London for some large technology projects.
"Asset managers have traditionally recruited technologists to integrate and tailor third-party vendor systems, rather than inhouse builds," says Andrew Keene, director of IT in finance recruiters Thomson Keene. "It's therefore likely that if more of these projects emerge this year, buy side firms will have to look to the investment banking sector for talent."
The problem is that there's something of a pay disparity between investment banks and fund managers, which has meant that the former has traditionally managed to attract the crème de la crème of the technology world. Persuading them to go in the other direction could be a challenge.
"The key is luring a senior technologist from an investment bank with the right career opportunity, the attraction often being the chance to be a bigger fish in a smaller pool." argues Paul Bennie, director of IT in finance headhunters Bennie MacLean.
"Once a major scalp has been secured, others then follow suit safe in the knowledge that a more senior colleague has done all the due diligence on the new organisation...albeit that this isn't always the case. Second and third-tier investment banks face the same challenge recruiting from the bulge brackets."