The bear market may have slashed the value of FMR Corp., the parent of Fidelity Investments, by as much as half. The estimates of the value of the privately held firm were provided by outside analysts based on a debt offering recently circulated by the firm.

Of course, the valuations are little more than a parlor game since there is no hint that the Johnson family, which controls the Boston, fund giant is even thinking about selling. Indeed, Abigail Johnson, daughter of Chairman Ned Johnson, is widely believed to be preparing to take the reigns of the firm. If the firm is not sold as part of an estate plan, there may be no need for the Johnson's to tip their hands. Fidelity now has more than $6 billion of working capital, meaning it is unlikely to require deeper pockets to finance capital projects.

The hefty chunk of working capital and its premier place as a distributor of asset-based retirement products to America's largest employers also suggests that the value reported by outside analysts reflect the current bear market pricing.

The analysts peg the value of Fidelity in today's market at between $15 billion to $20 billion, reports the Wall Street Journal. The market capitalization of publicly traded Charles Schwab is currently just more than $10 billion. Meanwhile, Merrill Lynch carries a market cap of $29 billion. Fund specialist Franklin Resources has a market cap of a little more than $8 billion and T. Rowe Price just $3 billion.

The analysts consulted by the paper added that Fidelity may have been worth as much as $30 to $35 billion when it last released detailed financial information in 1999. That analysis is based on a Fidelity's Ebitda that was $1.92 billion in 2002 (down from $2.63 billion in 2001 and $3.99 billion in 2000).

Fund firms, including Franklin and T. Rowe trade at eight to 10 times their Betide, according to the paper. By that measure, Robert Siobhan, senior analyst with Banc of America Securities, told the paper that Fidelity would be worth $15 billion. John Casey, chairman of Darien-based Casey Quirk & Action told the paper that Fidelity is a "one of a kind franchise" and bumped his estimate up to $20 billion.

Both estimates still sound low by a second measure, though. Asset management firms typically are priced off of their assets under management. The $15 to $20 billion price tag would make Fidelity worth just 2.0 to 2.6 percent of assets under management. That is a fairly pedestrian figure for the leading brand name in the fund industry. It also fails to account for Fidelity's position as the leader in the corporate services market.

The most similar comps to Fidelity's corporate services business may be Hewitt Associates and Mellon Bank. Hewitt does not manage assets, but is comparable to Fidelity as a benefits administrator to large corporations. Hewitt carries a market cap of $2.6 billion.

Mellon both managers assets through its Dreyfus funds unit and various institutional managers and provides human resource services to large employers through its Mellon HR and Buck Consultants units. Mellon carries a market cap of $9.3 billion and claims $583 billion in assets under management compared to $765 billion at Fidelity.

In short, a buyer could pick up both Hewitt and Mellon for just $12 billion. From that perspective a $15 billion to $20 billion price tag on Fidelity does not sound far fetched.  

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