The head of Fidelity’s $2.8tn asset management division is retiring from the Boston investment group after just a year in the job, to be replaced by a senior executive from its international arm.
Steve Neff was previously chief technology officer at Fidelity, and his appointment last year as head of its sprawling asset management arm was widely-seen as an indicator of how the investing industry is changing.
However, in a memo sent to Fidelity employees on Tuesday, the company’s chief executive Abigail Johnson said Mr Neff was planning to retire at the end of March. In the memo Ms Johnson said he “will be remembered as a skilled steward for Fidelity’s mutual fund shareholders and institutional clients, as well as an innovative leader of technology development”.
Mr Neff, an avid cyclist and 23-year veteran of the Boston money management giant, will be replaced by Bart Grenier, who is currently global head of asset management at Fidelity International, the company’s global affiliate.
Andrew McCaffery has been appointed global chief investment officer of Fidelity International, replacing Mr Grenier. He joined the company in July as Mr Grenier’s deputy.
“Bart is the ideal candidate to succeed Steve,” Ms Johnson said in the memo. “The breadth of his experience across investment strategies and asset classes, as well as his strategic insights and spirit of innovation, makes him well suited to lead asset management.”
Asset management profits have been buoyed by the post-crisis market rally, but executives are girding themselves for a leaner environment. Morgan Stanley estimates the global fee pool for active managers will shrink by a third — or about $40bn — over the next five years, and the listed industry’s shares have lagged behind the stock market rally lately.
Over $300bn has seeped out active equity funds this year, extending investors withdrawals over the past five years to north of $2tn, according to EPFR. Many investment groups, including Fidelity, hope that harnessing modern technology such as machine learning and data science will both be able to contain costs and improve performance.
“The investments we are making in technology are centred on two major goals: generating alpha and scale and efficiency,” Mr Neff said in a recent interview with the Financial Times.