Hedge Fund Reader : Fidelity looses two more fund managers to hedge funds

Comments

August 21, 2005

Fidelity looses two more fund managers to hedge funds

Fidelity investments had a major setback recently with two more fund managers leaving the company and joining a hedge fund. David Baverez and Krishnan Sadasivam have joined join London-based TCI Fund Management. Most mutual funds are today battling with the exodus of fund managers to hedge funds. They are unable to give them what hedge funds are able to – more freedom, more money and equity stake. The first casualty of Fidelity loosing its best fund managers to hedge funds dates back to 1996 when Jeffrey Vinik left the company to pursue a career in hedge funds. Baverez, a star performer, had been handling the fund since January 2003. During his time, the mutual fund almost doubled. This is commendable especially in the context of FTSE Europe index which rose only 60 percent in the same period. Fidelity has hit a rough patch off late. It is also battling embarrassing revelations in the gifts-for-commissions scandal. The group’s broker Kevin Quinn reportedly spent $1.6 million on expenses wooing Fidelity traders between 2002 and 2004 – according to The Wall Street Journal. Business.bostonherald.com reports:

“Fidelity, like all mutual fund companies, is battling to keep good managers. Hedge funds usually offer the best of them more freedom, more money and an equity stake.”

--
Did you enjoy this post?

August 21, 2005 in Research | Permalink