If you’re a technologist who works in asset management, it’s fair to assume that 2009 will be hard. However, it won’t necessarily be disastrous.

A study by investment management consultancy Investit, which took in responses from 17 leading fund managers in its annual IT value survey, found that 75% of firms intend to cut technology budgets next year, with 25% looking to either remain steady or expand.

The budget cuts aren’t catastrophic. Simon Stratford, who heads up Investit’s IT Value Survey, says most firms are expecting to cut spending by 15%. And around 10% of firms are still in expansion mode.

“There is very much a tortoise and a hare situation,” says Catherine Doherty, principal at Investit. “On one hand you have life funds, in-house schemes and index-tracking managers who are maintaining their steady rate of IT spend. On the other, high margin managers and investment bank-owned firms, who have been investing very aggressively in recent years, are looking to cut costs heavily.”

Unfortunately, most firms are planning to reduce headcount, but there are unlikely to be swingeing cuts. Around 5% of techies are likely to go, though Investit says contractors will be on the receiving end of the majority of cuts. Permanent hiring is largely frozen.

As within investment banks, contractors in fund management firms have been faced with rate cuts of around 10-15%. What’s more, around 20% have been laid off as firms look to reduce costs.

Those fund managers who are reducing their technology spend are cutting budgets by around 15%, says Stratford, but around 10% of firms are still in expansion mode.

“Bland statistics can be very misleading,” he says. “Most firms are planning to review budgets on a quarterly basis and the feeling is that budgets will react to market conditions. They will spend if they can afford to, because they still have a lot they want to achieve. The move to cut budgets is not catastrophic, it comes across as prudent, thoughtful and modest.”

The top cost saving measures were cancelling projects, reducing contractor staff and then driving down the costs of IT infrastructure.

Some bright spots remain, however, and the key area of focus for technology spend in 2009 will be data management, front office systems development around derivatives, projects to reduce IT infrastructure costs and operational and market risk systems.