GLOBAL - Fidelity Investments is expanding its institutional business through the creation of a separate company that will invest money on behalf of pension funds, endowments and foundations, the Boston-based manager has announced.
The move is intended to give Fidelity’s institutional offering – managed under the same corporate roof as its mutual fund business – its own identity, and increase the firm’s investment capacity, particularly for large institutional clients.
Currently Fidelity has some US$945bn invested in its mutual funds, and US$100bn in institutional business, both run through Fidelity Management & Research Co. (FMRCo). The two businesses share some resources, such as securities trading and research operations.
“With the growth of our institutional businesses and the opportunities they present, it makes sense to have a division focussed on managing these assets, particularly for trust, large 401(k) and institutional services sub-adviser customers,” said Edward C. Johnson, Fidelity chairman and CEO.
The new business will eventually become independent of FMRCo, but president Abigail P. Johnson said the two divisions would continue to share some resources through agreed-upon service arrangements.
Johnson said the company would serve corporate and public employee pension funds, endowments and foundations with commingled pools and separate accounts asset management, as well as focus on non-Investment Company Act of 1940 services.
“These anticipated non-mutual fund investment activities will be held within a separate investment adviser/sub-adviser, and managed by individuals separate from FMRCo,” he said.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.