Fidelity hints at a market neutral fund

Long-only US fund manager Fidelity is said to have plans to launch a market-neutral portfolio, marking the US asset manager's first expansion into hedge funds.

A spokesman from Fidelity in Boston did not confirm or deny the plans to launch the fund in the coming months, as reported in Barrons earlier this month.

It is believed Tim Heffernan, who now manages Fidelity's $73.5m Tax Managed Stock Fund, will run the market-neutral fund from the US.

The UK Fidelity group has said it still has no plans to enter this market and will continue to focus on long-only portfolios. It could not comment on whether the fund would be marketed into Europe from the US via Fidelity International.

The US group has lost a number of managers over the years to hedge funds, most notably ex-Magellan manager Jeffrey Vinik several years ago. Earlier this year, according to a Bloomberg report, an ex-Fidelity employee set up a fund of hedge funds, investing solely in portfolios run by ex-Fidelity managers and analysts. More recently US fund manager, John Muresianu, who left the group in June, has said he plans to launch a hedge fund called Lyceum Partners in the coming months which will be marketed at European investors.