Fidelity the Fund Firm, 401k Provider ... and Tourist?
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Wednesday, September 21, 2016

Fidelity the Fund Firm, 401k Provider ... and Tourist?

The word "tourist" is not a label one hears applied to Fidelity [profile] too often.

Abigail Johnson
President, Chief Executive Officer
A new report shows that Fidelity and several other giant mutual fund firms are playing a big role in a space traditionally dominated by Silicon Valley venture capitalists. That report, the 2016 VC Unicorn Report, was just released by Seattle-based Pitchbook and picked up by Business Insider and the Silicon Valley Business Journal.

Per Pitchbook's report, the Boston Behemoth is invested in 24 so-called "unicorns" (late-stage, still-privately-held startups with valuations of at least $1 billion), more than any one else, be they mutual fund firm or venture capital firm. Other mutual fund players on the list include: T. Rowe Price [profile], 5th (invested in 17 unicorns); subadvisor Wellington Management [profile], tied for 7th (14 unicorns); Goldman Sachs [profile], 9th (13 unicorns); BlackRock [profile], tied for 29th (7 unicorns); and the Hartford [profile] and Morgan Stanley [profile], both ranked 41st (6 unicorns each).

Garry Black, senior analyst at Pitchbook, calls mutual fund firms "tourist investors" in startup space. The Pitchbook folks describe a big increase in fundsters' interest in startups, noting that mutual funds worldwide invested a record-breaking $23.7 billion in venture capital deals in 2015, up 66 percent from 2014.

"VC-backed companies," Black states, are "more attractive than ever to tourist investors like mutual funds."

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