By Marion Davis
The mutal fund giant is investing $100M in Pyramis
Pyramis Global Advisors, a new company started by Fidelity Investments in March to focus on institutional investments such as large retirement funds and endowments, is slated to move to Rhode Island in 2008, the financial giant confirmed last week.
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Fidelity, whose FMRCo division already manages these types of assets, is investing about $100 million in Pyramis, which is being developed within FMRCo for now but will eventually become independent, according to the company’s initial announcement.
“With the growth of our institutional businesses and the opportunities they present, it makes sense to have a division focused on managing these assets, particularly for trust, large 401(k) and institutional services sub-advisor customers,” Fidelity Chairman and CEO Edward Johnson III said in March. “Our objective is simple: to increase Fidelity’s investment capacity and flexibility, as well as to continue to improve our service to customers.”
As of Jan. 31, Fidelity had $1.1 trillion in managed assets. In a letter cited recently in The Boston Globe, a Fidelity executive said Pyramis, which will start out on State Street in Boston, would manage more than $60 billion in assets. Pyramis is starting out with about 50 employees, Fidelity spokesman John Brockelman said, and it has already hired some top executives. But it still has a long way to go before it comes to Smithfield.
“It’s basically just in the startup phase right now,” Brockelman said. Asked how many people Pyramis would eventually employ, he replied: “I can’t discuss the specific number at this time, but we do expect growth.”
Asked whether Rhode Island’s Jobs Growth Act, a new law passed at Fidelity’s request to reduce the personal income tax liability of high-paid workers, played a role in deciding to locate Pyramis in Rhode Island, Brockelman said it was “one of many factors.”
Fidelity also considered the availability of an educated work force, Brockelman said, as well as the importance of geographic diversity. While a large part of Fidelity’s operations are based in Boston, its fixed-income division, for example, is in Merrimack, N.H.
Fidelity now employs about 1,700 people in its Smithfield complex, and company spokesmen have said before that there’s plenty of room for growth there.
