Fidelity plans to launch a dozen products in the next year and a half that will expand the mutual fund manager into the pension fund and endowment sectors.
Over a year ago Fidelity created an institutional arm named Pyramis, which has doubled its assets under management to $150 billion.
Pyramis plans to develop a more sophisticated field of long/short and quantitative investment products.
The group will introduce hedge-fund like performance fees for some of its products, Pyramis CEO, Peter Smail told the Financial Times. Though institutional fees are usually 1 percent or less of assets under management, some managers have also begun charging for performance fees too.
Pyramis has employed 124 investment professionals plus a separate team of research analysts, says Young Chin, chief investment officer of Pyramis.
This quarter it will launch lifecycle funds for the 410(k) retirement market, which complements Fidelity’s freedom lifecycle funds. During the second quarter it aims to introduce products based on liability-driven investing. And in the third quarter it will launch 130/30 funds, of which up to 30 percent is invested short.
Fidelity recently announced its brokerage company lifted client assets 21 percent in 2006 to almost $1,700 billion. New client assets rose by 24 percent to $44 billion in the fourth quarter.