Fidelity Investments is expanding its capital markets division by 20%, or 80 positions, in trading, sales, prime brokerage and operations to serve clients trading mutual funds and hedge funds.
While the prime brokerage businesses at investment banks have lost market share because of their parents' demise, Fidelity is "in a different spot" because it is a trusted, conservative name and is privately held, said Mark Haggerty, president of the capital markets division.
Currently, the unit has 400 employees, which grew by 25 last year. Assets serviced by the unit expanded by 179% in 2008, with net accounts growing 57% and hedge fund assets growing 127%.
"Our business model is something people are attracted to these days because we are private, because we are conservative, plus the fact you've got the other banks having to take money from the government," Haggerty said. "They look at us and see us as being different than the standard investment bank or brokerage firm they've been dealing with."
While Fidelity capital markets is a small player and only specializes in U.S. equities, the firm plans to expand those capabilities in the near future to included international equities, foreign currencies, and more securities lending along with bond underwriting and distribution, Haggerty said. However, it will not handle derivatives, leveraging or a large volume of fixed income, he added.
Now Seen as Opportune Time to Get Into Market
Amid all of the gloom, some stalwart financial planners are telling their customers that there are unheard-of bargains in the stock market, the National Post reports.
Admitting that some incorrectly called the bottom of the market in October, then again in November, advisers note that the market could gyrate for some time to come before it returns to a steady climb upwards. For those willing to sustain a bit more volatility, now is a perfect time to take advantage of low valuations, they said.
"If you are feeling depressed and hopeless, there is a good chance we are near the point of 'maximum financial opportunity,' otherwise known as the bottom," said Murray Leith, research director at Odlum Brown.
Robert Cable, head of The Cable Group, advised, "If you want to build wealth over your lifetime, you are far better off buying than selling today. There are oodles of high-quality stocks that are two-thirds off."
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