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March 9, 2009

Fidelity Expands Equities Desk

By James Ramage

Everyone recognizes that Fidelity knows mutual funds. But Fidelity Capital Markets wants to make sure institutions see that Fidelity knows equities trading, too.

To that end, Fidelity's agency brokerage recently added two top executives and hired eight trading pros. With all of the dislocation in the marketplace, it wants to boost its offerings in high-touch and electronic trading, as well as the transition management space, to get a piece of the action, said Michael Cashel, senior vice president of its equity business and one of those recent hires.

"Almost regardless of what the market's doing, I think we have an opportunity to take share," he said.

Cashel is responsible for the institutional and intermediary sales and trading desks, including equity block trading, program trading, options trading, international equity and the electronic brokerage services teams. He also will oversee the transition management and commission management functions.

He reports to Mark Haggerty, Fidelity Capital Markets' president. Cashel has nearly 20 years of equity trading experience and joins the firm from Bear Stearns. He said Fidelity's "liquidity profile" attracted him. On a really busy day, the firm executes more than 500 million shares of stock.

"Fidelity has a very large retail complex, a very large registered investment advisory group," Cashel said. "And all that order flow comes through our system and becomes a very compelling, unique and differentiated bunch of orders for us to show, and sell, to institutions."

He aims to double the firm's sales trading personnel. Although Cashel wouldn't give staff numbers, sales trading was an area that had been understaffed, he said, relative to the opportunity he saw when he arrived last September.

Cashel also said he's OK with the number of electronic traders he's hired. But even though he's expanded both the program trading desk and the transition management team, he said, there's still room for more staff in each.

"Given all the volatility, there are an awful lot of people who are changing managers," he said, "and that's another place where we see ourselves with a potentially competitive advantage."

Fidelity Capital Markets is making its move in an environment where the bulge bracket is disrupted, there is talent available and there is less liquidity in the market, said Jay Bennett, a managing director with Greenwich Associates. And Fidelity's offering pits the firm against a large portion of the execution and the execution-only pie, he added.

Success in this arena, therefore, will depend on whether Fidelity can deliver on its promise of ample liquidity. "By definition," Bennett said, "there's always an interest in finding liquidity where one can get a low-cost, anonymous, low-market-impact trade done."

In addition to Cashel, Fidelity hired Mathew McConnell as senior vice president and head of sales and trading for institutional equities. He reports to Cashel.

McConnell oversees the various sales and trading teams for the firm, including program trading and electronic brokerage sales. McConnell, a veteran of more than 25 years in equities, comes to Fidelity from Banc of America Securities, where he was managing director and co-head of institutional equity sales trading. McConnell also spent 15 years at Morgan Stanley as an executive director in the international equity sales trading group.

Fidelity Capital Markets also hired the following trading professionals for its equity team:

Daniel Connelly joins as vice president responsible for expanding the transition management program. Connelly arrives from Bear Stearns and is based in Boston.

Stuart Filippone joins as vice president for electronic brokerage sales. Filippone comes to the firm from 3D Markets Inc.

Sean Foley joins the equity trading team as vice president. Foley joins from Bear Stearns.

Justin King joins as vice president responsible for the Boston equity trading desk.  King arrives from Bear Stearns.

Joe McGowan joins as vice president and is a part of the program management team. McGowan comes to the firm from BNY ConvergEx Group.

Chris Ryder joins as vice president and will spearhead the commission management business. Ryder arrives from Bear Stearns and is based in New York City.

Dave Suomi joins the equity sales trading team in New York as vice president. Suomi joins the firm from A.G. Edwards & Sons.

Andrew Upward joins as business analyst in support of all Fidelity's equity offerings. Upward arrives from BNY ConvergEx Group.

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