Fidelity highlights growth in annual report

FMR LLC, the parent company of Fidelity Investments of Boston, reported a 15% increase in average assets under management for the year in its 2007 annual report released Thursday. Assets under management increased to $1.5 trillion. At year end, assets under management totaled $1.6 trillion, which combined with administered assets of $1.8 for a total of $3.4 trillion. Both totals had an increase of 15% over 2006. In addition, revenue totaled $14.9 billion, an increase of 16% over 2006. Income before taxes totaled $2.2 billion, which was 20% higher than 2006. Assets also rose at Pyramis Global Advisors, the institutional investment management business at Fidelity. Assets rose to $164.1 billion, up 10% over 2006, noted Fidelity chairman and chief executive Edward Johnson in his letter to shareholders. Money market funds took in $90 billion in flows in 2007. This was offset by outflows from Fidelity’s stock funds of $186 billion, reducing net flows for the year to $74.5 billion. This total also included $2.5 billion in bond flows. Mr. Johnson also noted that under the newly-formed Personal Workplace Investing Unit, assets under administration rose 8% to $918.4 billion and assets under management increased 9% to $519.6 billion. The Institutional Products Group also reported increases with the Fidelity Investment Institutional Services Co. ending the year with $311 billion in managed assets, 26% over 2006. Institutional Wealth Services also saw a 39% growth in assets to $345.2 billion. The report also included an interview with president Rodger A. Lawson who indicated that more innovation in product development is on the agenda for 2008, particularly in the institutional area. He noted the firm is seeing rapid growth in non-traditional investment vehicles such as hedging strategies and long/short hybrids. “This is an area where Pyramis can play a key role in helping us both to innovate and to ‘go global.’ In general, we have to be open to new vehicles and new market geography to drive future growth,” Mr. Lawson said in the report.