MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Thursday, August 31, 2000 Where's Fidelity Headed? Fidelity may be the nation's largest fund company, but that does not mean it is resting on its laurels. The Boston Behemoth has made a series of moves in recent months to ready itself to attack new markets and digest the gains it made in the Nineties. In recent months the firm has juggled its senior management team moving Robert Reynolds, who some are speculating is an heir apparent to Ned Johnson, from heading the retirement group to the COO slot. It has also made a large number of management moves in its employer services group and, according to some at the company, put spending under tighter review. The most recent announcement is that the company is opening a new facility in Marlborough, the nerve center of FIRSCo its giant 401(k) operation and its growing employer services company. The site is also home to Fidelity Systems Company. The fund giant currently has 3,000 employees in Marlborough in three buildings. The new 125,000 square foot fourth building is slated for an early 2002 opening will bring the campus to nearly one million square feet and provide space for 5,000. Obviously Fidelity expects to grow this operation. The new space is likely needed to handle the increased services offered by its newly-formed Fidelity Employer Services Company (FESCo) under Peter Smail. FESCo is one of the primary occupiers of the space and is focused on providing institutional retirement services, and benefits outsourcing including the firm's new payroll service. Even as Fidelity is readying for further expansion (it is also adding capacity at other facilities, said a spokesperson), it is selectively trimming its existing overhead. Really, this trimming should be no surprise after the heady growth the company saw in the last decade. From 1990 to 2000 Fidelity has grown to 31,000 employees worldwide from just 6,800. Any organization that has undergone that much growth has likely also added some flab, which may be why Ned Johnson moved Fred Henning from the fixed income division to be president of the Corporate Services Group about four months ago. Henning became known as a "fix-it" man in recent assignments (a title he says is not fitting). In his new role as he is overseeing what are essentially the corporate, inward focused areas of Fidelity. This includes corporate compliance, audit, security, supply management, real estate and internal consulting. All told this group today consists of about 900 people. Those who are looking for large cuts in the group are barking up the wrong tree, said Henning, who reports to Reynolds. He explained that there will not be a massive change, and that any change that there will be will be "fine tuning". And fine tuning does not not necessarily involve cutting, he added. Word has it that Henning's focus is on cleaning out any plaque that has formed in Fidelity's arterial network. As the company has grown, people have grown into roles that they are necessarily best suited for, say insiders. This means that technicians are finding themselves in managerial roles. Henning admits that this is something he is taking a hard look at. "It's always important in any organization to have the right people in the right spots," he allowed. "I want to make sure that we have the right people in the right slots and the right number of people. That might be more people," he added. Henning calls this review "pretty routine" and adds that "there is nothing that is broken" and that the current staff is a "very impressive group of professionals." So what do the moves mean? It looks like Fidelity has once again identified an a growth business that most other investment management firms are missing. Fidelity is no longer an just an asset management firm, it is also an information services and technology firm serving corporate clients. Printed from: MFWire.com/story.asp?s=26129 Copyright 2000, InvestmentWires, Inc. All Rights Reserved |