Pyramis (Fidelity) breaks with its traditions – turns to portable alpha for the first time
Sep 25th, 2006 | Filed under: Portable Alpha & Alpha/Beta SeparationBy: Mathew Smith, eFinancialNews.com
Published: September 25, 2006
Pyramis (a.k.a. Fidelity’s institutional business) has seen the light. As eFinancialNews.com reports, the oddly-named goliath has taken a first tentative step into alternatives (note to branding firm: choose corporate monikers that don’t look like “pyjamas” when you read them quickly).
Is it only a matter of time before Fidelity Magellan becomes “portable Magellan”? Says eFinancialNews…
“For the first time, Pyramis is turning towards portable alpha – a strategy that allows investors to transfer the returns achieved by managers from one benchmark to another. It is a marked difference from how it runs retail mutual funds, which are sector, style or market led.”
But apparently Pyramis is not in the hedge fund business, just the “(alpha) overlay business”…
“The hedge fund strategy is an overlay that will be managed within the portfolio team and not result in a standalone product.”
Alpha Male got a weird sense of deja vu when he read what Pyramis CEO Peter Smail had to say about the cordial relationship he had with his parent firm…
We haven’t had any discussion in regards to making Pyramis a spin-off. Why would we? We’ve got the best of both worlds with a separate business and the ability to leverage Fidelity’s resources.
Before tilting at windmills, Smail might consider touching base with Tanya Beder, the recently departed head of Citigroup’s ”in-house but separate, arm’s length but resource-leveraging” hedge fund unit, Tribeca Global Management (see post).
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