Money not the main motivator for techies moving to hedge funds

With hefty salaries, guaranteed bonuses and the offer of equity on the table, it seems that any self-respecting investment banking techie would be foolhardy not to make the move across to a hedge fund.

Indeed, research from ReThink Recruitment says that base salaries of 80-100k, and a guaranteed bonus to match, is proving alluring to an increasing number of chief technology officers, lead algorithmic developers and technical architects working in investment banks.

But in the long-term, jumping ship for an immediate monetary incentive could costly. There are currently rumours of a lot of bonus disgruntlement among the IT ranks within investment banks, and our own research suggests average payments were around 28k for techies this year.

However, should techies make it to the senior ranks of an investment bank, the rewards could be greater. Headhunters are pointing to total comp of between 350-750k for director level technologists this year (dependent on managerial duties and the geographical spread of responsibilities), while the hallowed few that make it to a chief information officer role at a bulge bracket bank can expect packages of 1m+.

"Obviously, there are only a handful of very senior ranking technologists in bulge bracket banks, so for those at stuck director level, the prospect of guaranteed bonuses, and an equity stake in the company means hedge funds are an appealing prospect," says Paul Bennie, director of IT in finance headhunters Bennie MacLean. "But, more recently, we've seen senior hedge fund technologists making the move back to investment banks."

And, outside of the hedge fund start-up space, the turmoil of recent years in the industry has mean few firms have an appetite to recruit senior technologists.

"We're currently seeing little appetite from hedge funds to recruit technologists at a managerial level, with most firms choosing to promote from within," says Nick Finlay, head of investment management at Hays Finance Technology. "Instead, most of the demand is for C# and Java developers in addition to IT Support people with a wide-range of experience across a multiple asset classes."

But often the main motivator for investment banking techies moving to hedge funds is not monetary, suggests Paul Elworthy, managing director of Hudson IT.

"There's the obvious lure of bonuses, particularly now that the banks are more constrained in this respect, but as well as a less bureaucratic working environment, at a hedge fund there's a sense that the product they work on is directly linked to the profitability of the organisation," he says.

So, while within an investment bank IT is largely seen as a cost centre, techies can enjoy an elevated status within a hedge fund.

"The trading process of many of these funds is now so IT-dependent, that they are increasingly taking the leading role," argues Fhamid Malik, head of financial services at ReThink.