Fidelity
Investments Says it Has No Plans for Hedge Funds
Fidelity
Investments has no plans to enter the hedge fund retail marketing
business, such disclosure was made by Robert Reynolds, the vice chairman
and investment officer for Fidelity. According to Mr. Reynolds, running
mutual funds and hedge funds under one roof may create a conflict of interest
he explained. Reynolds said, "We have elected not to provide those
types of funds, and we don't see that changing in the near future".
Fidelity mutual fund managers move over to hedge
fund management
Fidelity Investments wants to avoid such conflict according to Reynolds,
but he acknowledged that some Fidelity’s investors are asking for
such strategies. Many veteran mutual
fund managers are increasingly moving over to hedge fund management
[Hedgeco.net previous story] Fidelity has also lost some of its best mutual
fund managers and analysts to the Hedge fund industry. David Glancy, one
of the best stock analysts at Fidelity, and John Muresianu have left Fidelity
and now run their own hedge funds.
Reynolds said Fidelity would not stop its mutual fund managers from moving
over to hedge fund management by creating its own hedge funds, "We
want to try to avoid those conflicts”, Reynolds said.
Differences between Hedge Funds and Mutual Funds
Some of the differences between hedge funds and mutual funds include
investment strategies and philosophy. Hedge funds operate in loose regulatory
environment, and use many investment strategies such as stock shorting
techniques to trade, while mutual funds are regulated by the SEC, and
generally rely on “buy and hold strategies” for trading purposes.
Hedge funds are growing faster than mutual funds, but the overall assets
of mutual
funds, [about$ 7.5 trillion] dwarf those of hedge funds [about $800
billion]. While Fidelity Investments is not interested in running hedge
funds, other mutual
funds have not categorically ruled out hedge funds, some are studying
ways to accommodate hedge funds and still maintain its core mutual fund
business. Meanwhile the Securities and Exchange Commission continues to
investigate the recent mutual fund/hedge fund trading scandals; such investigations
may ultimately lead to new regulatory oversight for both industries.
Paul Oranika
Editor-in Chief
Hedgeco.net
Email: Editor@hedgeco.net
Related Reading:
 What
is a Hedge fund?
Following
the Money Trail: Increasing numbers of Traditional Investment Managers
move over to Hedge Fund Management: An Analysis
SEC
(Securities and Exchange Commission) Turns its Attention to Mutual Fund
Brokerage Scandals
Pioneer
Investments to Offer Multi-Strategy Hedge Funds
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