Increased staff costs take toll on Fidelity’s profits
Profits at Fidelity Investment Management Limited, one of the UK’s largest fund management groups, dropped 40% last year to £16m (€20m) despite increasing revenue, as the company took on an extra 200 staff.
Staff numbers at the company rose from 2,595 to 2,797, according to its accounts for the year to June 30, 2007, filed at Companies House last week. The documents are understood to account for a large portion of Fidelity International’s UK and European business and two thirds of global assets under management, or about £100bn out of £150bn.
Since the period covered by the accounts, markets have taken a downturn and Fidelity is understood to have identified staff cutbacks, mostly in administrative roles, of about 170 across its European offices. The manager employs 4,500 worldwide.
Last year, the retail operation at Fidelity Investment Management continued to drive revenue, which increased by 7% to £776m. The company also sold an extra £10bn of products through its retail distribution platform, FundsNetwork.
Fidelity also said it had seen a reduction in institutional mandates during the year, with total funds under management falling 13% to £98.3bn.
Fidelity is recovering from a period of underperformance in its institutional products. It has benefited from an underweight position in financials and an overweight position in mining during last year.
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