Hedge funds, which have been among the biggest spenders on technology over the past five years, are expected to slash the amount they spend on new systems by 20% or $350m (€251m) this year, in the wake of heavy losses and record investor redemptions.

Hedge funds in the US, Europe and Asia will cut their total IT expenditure to around $1.35bn in 2009 from $1.7bn last year, as they postpone major new investments and focus on improving the efficiency of existing infrastructure, according to Boston-based financial consultancy Celent.