Fidelity profits up 22 percent
A strong stock market and a reorganization of its leadership team helped push pre-tax income at Fidelity Investments, the world's largest mutual fund company, up 22 percent last year to $2.2 billion, the company said in its annual report.
In a letter to shareholders of Fidelity's parent company, FMR LLC, chairman and chief executive Edward C. "Ned" Johnson III said the company posted "strong operating results" for 2007.
But expenses also rose, he wrote, citing costs for employees, advertising, and interest. Johnson also noted that while the performance of many of Fidelity's mutual funds has improved, so far that hasn't translated into a flow of new investments into the funds.
Fidelity publishes the report to inform shareholders of the parent company. It is not required to make its financial performance public, but voluntarily chooses to do so.
Last year, the company converted to a limited liability corporation for tax purposes. As a result, it reports pre-tax income, which is then distributed to shareholders, rather than net income. The company also named Rodger A. Lawson, formerly vice chairman of Prudential Financial Inc., as its president. Lawson had previously worked at Fidelity in the late 1908s.
Fidelity is one of the largest employers in Massachusetts. At the end of December, the company employed 46,500 workers worldwide, including 12,700 in Massachusetts.
(By Ross Kerber, Globe staff)
