Fidelity plans alternative investments offering

The US mutual fund company is to offer private equity, venture capital, real estate, and exchange funds to wealthy individuals.

Fidelity Investments has confirmed that it is to offer alternative investments to investment advisors who want to expand their product offerings to high net worth clients. 

The firm is to make alternative investments, investments in private equity, venture capital, real estate, and exchange funds, available to advisors with at least $25m in assets under custody with Fidelity’s institutional brokerage group and a minimum of one client that meets the SEC’s $1.5m net-worth requirement to invest in certain private partnerships. 

The proposal is an attempt to offer a more diverse range of products to high net worth individuals (HNWIs), who are showing increasing interest in alternative assets following the downturn in the public markets. In April, the Spectrem Group published figures showing that 62 per cent of HNWIs with assets of $25m-plus invest, or are looking to invest, in alternative investments. 

Fidelity, which has also announced a new estate planning service, will sell the new products only through its network of financial advisers and will manage them itself. Fidelity has still not joined its competitors in offering hedge funds, a market which the firm fears may already be saturated.