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IT developers double pay by moving from banks to new breed of hedge fund start-ups

IT developers double pay by moving from banks to new breed of hedge fund start-ups
Hedge funds giving equity to IT staff
Developers increasingly taking over traders job
IT developers working in investment banks are doubling their pay (compensation) by moving to a new wave of hedge fund start-ups, says ReThink Recruitment, the technology staffing company.
ReThink Recruitment says that it has recently placed IT professionals with hedge funds on 80,000-100,000 basic salary plus a 100% guaranteed bonus almost twice their previous level of remuneration. ReThink says that this level of compensation is increasingly common among start-up hedge funds.
According to ReThink, the pressure on banks to limit and defer bonuses and pay only a small percentage in cash is allowing hedge fund start-ups to poach key IT staff from the banking sector.
ReThink Recruitment says that senior-level IT developers, such as Chief Technology Officers, lead algorithmic developers and technical architects, are now being offered equity in start-up funds. Traditionally, start-up hedge funds have only provided equity to front-office staff.
According to ReThink Recruitment, the value of the equity offered to IT Developers can boost their total compensation by six-figure sums.
Fhamid Malik, Head of Financial Services at ReThink Recruitment, comments: There has been a flurry of new hedge funds starting up in London we have acted for four in the last few months. IT infrastructure is critical to how these funds trade, so they are prepared to pay a premium for the right IT skills.
Banks have their hands tied over bonuses, which is allowing this new breed of hedge funds to poach key IT staff. IT is critical to competitive advantage in the financial services industry, so banks will need to find innovative ways to retain staff if they are to compete in this escalating arms race.
According to ReThink Recruitment, the continued development of quant funds, which trade according to computer programmes utilising historical data, is leading to IT developers taking over dealers jobs.
Fhamid Malik says: Senior IT developers are increasingly being given equity in start-up funds. This is on top of the normal bonus. We are even seeing IT developers ask for a share of the desk profit, which although small in percentage terms, can equate to a five figure sum. 
The trading process of many of these funds is now so IT-dependent, that they are increasingly taking the leading role. The rationale behind this is that the designers of these computer models understand the systems much better than old-school dealers and so are better placed to manage the fund.
ReThink adds that a number of new funds are also looking at greenfield builds i.e. entirely new software to replace off-the-shelf IT systems.


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