Pressure on banks to limit and defer bonuses and pay only a small percentage in cash enabling hedge fund start-ups to poach key IT staff from the banking sector, according to technology staffing specialist ReThink Recruitment.

ReThink Recruitment reports it has recently placed IT professionals with hedge funds on £80,000-£100,000 basic salary plus a 100% guaranteed bonus nearly twice their previous level of remuneration. The group adds that this level of compensation is increasingly common among start-up hedge funds.

While, start-up hedge funds have traditionally only provided equity to front-office staff, 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.

Fhamid Malik, head of financial services at ReThink Recruitment, says: “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.”