Fidelity Investments is cutting out its middleman — Goldman Sachs Group Inc. — when dealing with Wall Street short sellers, Bloomberg News reported. The money manager is bringing its stock-lending business in-house, according to a March 29 regulatory filing, instead of paying Goldman Sachs to run it. According to filings, the bank received about 10 percent of the revenues generated by Fidelity’s lending, primarily to firms that borrow stocks to bet against them. Fidelity, which managed $2.7 trillion of assets in March, plans to use some of the savings from the switch to boost returns in the funds that lend securities, particularly index trackers that hold thousands of different stocks. The move comes as Fidelity and its rivals compete to cut fees on index funds, luring assets that can be used for more profitable businesses like securities lending, industry analysts say.
