BOSTON/NEW YORK Fidelity Investments, the world's biggest mutual fund firm, said on Friday it will shut down its small private equity unit next month because the financial crisis has made it difficult to access new capital.
The two-year-old unit controlled about $500 million (303.5 million pounds) in assets, a fraction of the $1.25 trillion managed by its privately held, Boston-based parent.
Fidelity spokeswoman Anne Crowley said the decision to close the unit, Fidelity Equity Partners, was made because debt financing had become very difficult to obtain.
In the last two years the unit made acquisitions in four companies, and Fidelity plans to retain those ownership stakes.
The unit took stakes in imaging solutions company Picsolve International, financial data management companies Complinet Group and Asset Control Inc, and oil and gas equipment company Production Control Services Inc.
The unit employed 14 people, with half working in the United States and the other half in London.
Fidelity was a very small player in the $1 trillion private equity industry, but its problems are shared by others who faced difficulty finding financing.
The unit did not invest client money, Crowley said.
Fidelity's venture capital arm, Fidelity Ventures, is not affected. "This group remains active and is seeking new investments," Crowley said.
Rob Ketterson, who oversees Fidelity Equity Partners and Fidelity Ventures, will continue to be in charge of Ventures.
(Reporting by Svea Herbst-Bayliss and Anupreeta Das; Editing by Jason Szep and John Wallace)
The Pentagon releases photographs linked to allegations of abuse of detainees in Iraq and Afghanistan.