Google, Space, a Dark Pool: What's Fidelity Up to?
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Wednesday, January 21, 2015

Google, Space, a Dark Pool: What's Fidelity Up to?

This week Fidelity [profile] made key investments in two very different ventures, with an interesting set of allies.

Yesterday the Boston Behemoth teamed up with eight other large asset managers to create a dark pool, Luminex, for their own trading. Also yesterday, SpaceX unveiled a new, $1-billion round of funding from two new investors: Google and Fidelity.

Is this a glimpse of the future, of the new Abby era at Fidelity?

In the case of the dark pool, Fido's allies are eight big competitors: BNY Mellon, Capital Group [profile], Invesco [profile], J.P. Morgan Asset Management [profile], MFS [profile], State Street Global Advisors [profile], and T. Rowe Price [profile] (but not Vanguard). Each of the nine asset managers involved will have a seat on the board of Lumniex, which will open for trading this year with a minimum block size, and Fidelity's Michael Cashel serves as Lumniex's interim CEO. If all goes as planned, Luminex should save Fidelity and its peers on trading costs, while also keeping their trades away from high-frequency traders.

Bloomberg, the Financial Times, Reuters, the Wall Street Journal, and many others all covered the unveiling of Luminex.

As for SpaceX, Google and Fidelity will own a combined 10 percent of Elon Musk's aerospace space company. There's no details on how the $1-billion investments breaks down between Google and Fidelity money, but the deal hearkens back to the Ned days at Fidelity, when he would invest in companies unrelated to money management, companies that operated ferries or limos or real estate. And the investment also comes as industry insiders whisper that Google may be interested in getting into the financial services space. If so, could Fidelity be a key Google ally, akin to its relationship with Microsoft back in the 1990s? Back in 2013, Google re-upped with Vanguard as its 401(k) recordkeeper; if the Fidelity-Google relationship goes deeper than co-investing in space travel, then keep an eye on what Google does with its plan next. If Google switches to Fido, MFWire smells smoke.

Bloomberg, Business Insider, Forbes, New York Times, Reuters, USA Today, the Wall Street Journal, the Washington Post, and many others covered the Fidelity-Google SpaceX round.

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