Data analysis drives fund managers to spend double the UK average on technology

Feature

Data analysis drives fund managers to spend double the UK average on technology

Business Focus is a weekly column providing at-a-glance statistics and commentary on spending priorities and trends in particular sectors. This week we look at fund managers.

Fund managers, who oversee and manage the investments of institutional and private investors, are highly dependent on IT to analyse and manage their asset and stock selections.

It is no surprise, therefore, that among larger organisations technology investment is nearly double the UK-wide business average. The differential is more marked among small and medium-sized enterprises, where average spending is close to three times the IT investment of their counterparts across all industries.

The figures show that larger fund managers spend on average £15,155 per desktop a year, against the UK average of £8,897. SME fund managers spend £8,874 per desktop per year, compared with a UK average of £3,132.

This level of spending outstrips the investment made by retail banks, but, among larger firms at least, is some way short of the average annual IT spend among stockbrokers, securities firms and commodity brokers of £20,017.

The difference in investment between these two branches of the investment community reflects stockbrokers' reliance on rapid real-time data from many sources to enable decision making on trades. For now at least, fund managers' long-term perspective on some of their investments puts the use of expensive automated algorithmic trading systems further down their priority list, though competition in the years ahead could move the goalposts and drive further IT spending.

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Methodology

The analysis is based on Computer Weekly's database of more than 60,000 IT budget holders, twice yearly user IT expenditure surveys, CBI/Kew senior executive surveys, government surveys, government demographic data, HM Treasury economic forecasts and Cambridge Econometrics industry sector forecasts.

Further details

www.kewassociates.co.uk


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This was first published in October 2006

 

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