Fidelity president says assets, inflows rise

BOSTON (Reuters) - Fidelity Investments' assets under administration increased to $2.9 trillion in the first seven months of the year despite a choppy time for the industry, company President Rodger Lawson said on Wednesday.

Total assets under administration rose from $2.6 trillion at the start of the year, and for the year through June 30 Fidelity recorded $74 billion of net inflows into its products and those it sells for other companies, he said.

"In spite of all the stresses and strains (of the financial crisis) we are coming out of this strong," Lawson said in a rare interview at the company's headquarters in Boston's financial district.

Lawson also played down the company's interest in exchange traded funds.

The inflow and total asset figures dwarfed competitors by Fidelity's analysis. Lawson called them a testament to the closely held company's diversified business base, which includes brokerage and retirement services, life insurance and employee benefits along with its well-known mutual funds.

Lawson said he spoke to a few media outlets to underscore the company's health to employees and customers.

Employees have been shaken by recent job cuts and talk of a succession, which could signal upheaval, but Lawson said that while head count of 38,000 would likely remain flat: "the days of the big layoffs are gone."

Lawson said he was "fairly pessimistic" about prospects for strong U.S. growth but customers should see the company's resilience in its scale and improved fund performance.

SUCCESSION

As for a possible job change, Lawson said he was "not looking to leave" the company and would stay for "as long as it wants, even if it's 10 years."

But he added: "I'm 62 and I don't want to do this forever," and repeated past company statements that it was considering who might eventually succeed him.

Power at Fidelity rests with its controlling Johnson family and many wonder if the company might be for sale once Chairman and Chief Executive Edward C. "Ned" Johnson III, 79, leaves.

"We are not trying to sell the company and as far as I know it will always remain a private company," Lawson said.

Lawson gave no details of the company's revenue and profits, which are usually released only at the start of the year, but said Fidelity is pulling away from its rivals in terms of size and assets under management, a key driver of fees.

When assets fall it can lead to big losses and many publicly traded asset managers fared poorly in 2008 and in the first quarter of this year before bouncing back in the second.

As for ETFs, Lawson said Fidelity would likely not expand unless it came across a good deal, though it has only introduced one ETF while its rivals have grown more rapidly.

It is already a major seller of ETFs from other companies, he said and cited their low profit margins.

Fidelity did not bid for the giant ETF business BlackRock Inc (BLK.N) agreed in June to buy from Barclays PLC (BARC.L) for $13.5 billion, he said.

Lawson said he admires BlackRock Chief Executive Laurence Fink but the low profit margins of the ETF business made BlackRock's deal "kind of ballsy."

(Editing by Matthew Bigg and Steve Orlofsky)