While the prime brokerage businesses at investment banks have lost market share because of their 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% last year, 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 youve 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 theyre been dealing with.
Whereas 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.
