Former Fidelity executive poses new challenge to 401(k) unit
BOSTON, April 3
BOSTON, April 3 (Reuters) - Robert Reynolds, a former Fidelity Investments executive, wants to become a formidable rival to the largest U.S. 401(k) recordkeeper.
Reynolds, who runs Great-West Lifeco U.S. Inc, said on Thursday he struck a deal to buy the large 401(k) recordkeeping unit of JPMorgan Chase & Co Inc. The deal, in which terms were not disclosed, creates the second-largest U.S. recordkeeper of 401(k)-style retirement plans with 6.8 million participants and $387 billion in assets.
"I approach this as we want to be the best," Reynolds said. "I helped build Fidelity's business and the focus always was being the best at what we do."
However, Fidelity still dominates that retirement plan recordkeeping market by a wide margin. Its full defined contribution recordkeeping assets under administration totaled $1.36 trillion at the end of 2013, a Fidelity spokesman said. That's up from $678 billion in 2008. Those assets include 401(k) plans and the defined contribution plan assets of nonprofits and universities, for example.
Reynolds is well known inside Boston-based Fidelity. He was a senior executive there and his office was right next to Fidelity Chairman Edward C. Johnson's. Reynolds left Fidelity in 2007 after a 24-year career.
Last month, Reynolds was named chief executive of Great-West Lifeco U.S., which also owns Boston-based Putnam Investments and Great-West Financial in Denver. Reynolds had been serving as CEO of Putnam, where he landed in 2008 after leaving Fidelity.
Reynolds said JPMorgan's book of business includes plenty of mega 401(k) plan clients who are Fortune 500 companies. The Great-West recordkeeping business covers smaller 401(k) clients and the nonprofit sector, he said.
Reynolds did not rule out more acquisitions. But he said the JPMorgan deal puts Great-West in a position to also grow organically.
"We feel very confident that with what we have today we can grow dramatically organically," Reynolds said. "But I'd never sit here and say I'd never do another acquisition either." (Reporting By Tim McLaughlin; Editing by Bernard Orr)