Fund managers are likely to have more need for IT skills as they seek to resolve problems exposed by the recent credit crunch, according to IT staffing firm ReThink Recruitment.
The firm said hedge funds and proprietary trading desks in banks would want to take apart and rebuild the computer models that help them determine when to buy and sell investments. Financial institutions might also need to improve their electronic clearing systems, some of which seized up because of high trade volumes during the crisis.
According to ReThink Recruitment, many of the funds that invested in the mortgage-backed securities at the centre of the crisis are so-called ‘quant funds’, which make trades determined by computer programmes using historical data.
Computer-driven quant funds are believed to have sustained some of the heaviest losses during the recent sub-prime crisis. Goldman Sachs alone pumped £1bn into its own quant fund during the single worst week of the crisis.
Jon Butterfield, MD of ReThink said some of the funds which sustained the heaviest losses were computer-driven, which meant their trading decisions were “essentially pre-programmed”.
“These funds will need to look at refining and testing their computer models so that they are better equipped to predict and respond to market volatility. They will need to improve the capability of their IT systems to measure risk levels and exposure to positions more accurately.”
Research by ReThink Recruitment earlier in the year revealed that the proportion of City IT staff working in hedge funds had doubled to 6% over the past 12 months. 7% of City IT staff work for traditional fund management companies.
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