Fidelity will no longer hold any part of the company, but executives will hold minority stakes. Geode is also now becoming subadvisor to Fidelitys index funds, a move that makes sense as Geodes president, Jacques Perold, is leaving the firm to continue as head of the spin off, The Wall Street Journal reports. Perold had also overseen all of the firms index funds, which have $28 billion in assets under management.
The spin off comes only three months after Fidelity President Abigail Johnson remarked that well-balanced mutual funds, rather than hedge funds or other alternative investments, are a better choice for investors.
Fidelity, which founded Geode two years ago, invested $229 million in its technology, the Boston Business Journal reported earlier this year.