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Private Company
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Boston , USA
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Boston , USA (FMR),<br> Bermuda (FIL)
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Edward "Ned" C Johnson 3rd , Chairman of the group<br /> Will Danoff , Manager of Contrafund, Fidelity's largest fund, Harry Lange , Manager of Magellan Fund
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41 200 ( 2007 )
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Financial Services
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Mutual Fund s, Trading & Investing , Retirement & Planning
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$1287 Billion USD ( 2006 )
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$118 Billion USD ( 2006 )
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is a group of
Privately Held companies in the
Financial Services industry. It is made up by two independent but closely cooperating companies, '''Fidelity Management and Research Corporation''' (FMR Co.), founded in 1946 and serving the North American market, and '''Fidelity International Limited''' (FIL), spun off in 1969 to provide investment products and services to clients outside the Americas. Fidelity Investments includes a large family of
Mutual Fund s, their distributors and investment advisors, and a retail
Brokerage , as well as unrelated businesses.
Fidelity is a privately held company founded by Edward C. Johnson 2nd in 1949 and still controlled by the Johnson Family. Fidelity Management & Research Company, the US investment management division of Fidelity Investments, acts as the investment adviser to Fidelity's family of mutual funds. FMR Company has three fund divisions: Equity (headquartered in
Boston, Massachusetts ), High-Income (Boston) and Fixed-Income (
Merrimack, New Hampshire ). Actual day-to-day management of these funds is subcontracted by that company to one or more of its subsidiaries. The company's
Subsidiaries serve as distributors and transfer agents to the entire Fidelity fund family.
FMR serves more than 21 million investors through individual and institutional accounts, with more than 300 different funds. Revenues in 2005 were $11.1 billion, up 10 percent compared to 2004. Assets under management rose nine percent to $1.2 trillion at the end of 2005. Currently, FESCo holds almost $3 trillion in managed assets.
The company's largest equity mutual fund is Contrafund, which has more than $69 billion in assets, making it the largest single-manager fund in the US. The current manager of Contrafund is Will Danoff.
Magellan Fund is the second largest equity fund, with $45 billion in assets. Its current manager is
Harry Lange , who previously managed the Fidelity Capital Appreciation Fund. The
Magellan Fund was for many years the largest in the
United States . It was run by Ned Johnson (May 2,
1963 to Dec. 31,
1971 ) and
Peter Lynch (May 31,
1977 to May 31,
1990 ).
Fidelity Investments also operates a major online discount brokerage and has investor centers in about 100 cities throughout the US and Canada, as well in Europe and Asia.
In addition to its mutual fund and brokerage businesses, Fidelity also has a strong presence in the HR and benefits outsourcing business. Fidelity Employer Services Company(FESCO) is the largest provider of 401(k) retirement plan services in the country. Other services provided include pension administration, health & welfare administration, as well as payroll and other HR record-keeping services.
Fidelity Investments also owns many unrelated businesses, including a charter
Motor Coach service, a luxury hotel, and a temporary
Employment Agency . It formerly owned
Community Newspaper Company , the largest chain of newspapers in suburban
Boston , sold to the ''
Boston Herald '' and now owned by
GateHouse Media . It recently acquired a large stake in a Japanese Telecom Company which illustrates Fidelity's strategy of diversifying into other sectors.
One sector in which the company has heavily invested is in commercial lumber and building materials. This new business has been developed under the Pro-Build Holdings company brand, which is a wholly-owned subsidiary of Fidelity Capital.
Pro-Build Holdings currently operates more than 500 lumber and building product distribution, manufacturing and assembly centers throughout the U.S., operating under several regional brands, including Hope Lumber, United Building Centers, Spenard Builders Supply, Lumbermens, Home Lumber Company, Dixieline Lumber Company, Parker Lumber Company, F. E. Wheaton & Company, Strober Building Supply, U.S. Components, Lanoga Corporation and the Contractor Yard. Pro-Build has more than 16,000 employees with 2006 revenues in excess of $6 billion.
US brokerages regulator
NASD fined four FMR-affiliated broker-dealers $3.75 million for alleged registration, supervision and e-mail retention violations in February 2007. The broker-dealers settled without admitting or denying the charges.
Fidelity Brokerage was ordered to pay $2 million to settle charges that employees altered and destroyed documents in 21 of its 88 branch offices from January 2001 to July 2002. Fidelity has internal inspections every year to make sure it is complying with federal regulations. The Securities and Exchange Commission accused that Fidelity management pressured branch employees to have perfect inspections and gave advance notice of the inspections and that at least 62 employees destroyed or altered potentially improper documents maintained at branch offices including new account applications, letters of authorization and variable annuity forms.
The founding Johnson family controls most of Fidelity.
Edward "Ned" C. Johnson 3rd is chairman of the group. His daughter,
Abigail Johnson , was once the largest single
Shareholder with about 25%, but in October 2005, it was reported that she had sold a "significant" portion of her shares to family trusts, and that there are doubts as to whether she is still in line to succeed her father.
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The FMR mutual funds are organized as
Massachusetts Business Trust s tied to the lifetime of the Johnsons. Some of Fidelity's best known fund managers also own a share in the company, most notably
Peter Lynch .
Revenue in
2003 were US$9.2 billion, followed by US$10.5 billion in
2004 . As of 2007, Fidelity had 47,000 employees.
FMR's corporate headquarters are located in
Boston, Massachusetts , with the largest U.S. operations located in Marlborough,
Massachusetts , Merrimack,
New Hampshire , Smithfield,
Rhode Island , Westlake,
Texas , Covington,
Kentucky ,
North Carolina ,
Ohio , and
Utah . It also has offices in
Canada in
Toronto ,
Montreal ,
Calgary and
Vancouver . (In 2007, Fidelity Canada was named one of
Canada's Top 100 Employers , as published in
Maclean's magazine, the only mutual fund management company to receive this honour.
1) As of 2006 Fidelity is in the process of opening a large site in
Jacksonville, Florida , to serve as a customer service center similar in size to its New Hampshire site.
FIL's offices include asset management companies in 10 locations:
London ,
Luxembourg ,
Frankfurt ,
Paris ,
Tokyo ,
Hong Kong ,
Bombay ,
Seoul ,
Singapore and
Sydney , and an extensive network of offices in 23 countries, employing more than 4,000 people.
Fidelity has experimented with innovative marketing techniques directed to the aging baby boomers, recently releasing ''
Never Stop Doing What You Love '', a not-for-resale compilation of songs by
Paul McCartney , created for Fidelity's employees and clients. The ex-Beatle became the firm's new
Spokesman in 2005 in a campaign entitled "This Is Paul." On the day of the disc's release, company employees were treated to a special recorded message by Paul himself informing them that "Fidelity and
have a lot in common" and urging them to "never stop doing what you love".Jenn Abelson, ''Brand on the run: Struggling Fidelity turns to ex-Beatle to lure boomers." Boston Globe, September 8, 2005, [http://www.boston.com/business/articles/2005/09/08/brand_on_the_run/ , accessed on August 16, 2006.
