The departure of Fidelity Capital Markets' head of transition management has spurred talk of what will happen at the firm, which had looked at expanding its transition management business to the defined benefit market from defined contribution plans.
Kevin Byrne, who was New York-based vice president at Fidelity Capital Markets, left the firm June 12. Fidelity spokeswoman Nicole Abbott said firm executives would not comment on the reason for his departure. Mr. Byrne, reached via e-mail, said he would not comment.
Mr. Byrne was hired in 2010 in an effort by Fidelity to expand into defined benefit transition management and also increase its traditional DC business.
One source said Fidelity now might concentrate solely on its DC business. “I never saw them as being big in defined benefit,” the source said. “I know they run a good business in their little niche” in defined contribution.
But John Donahue, senior vice president and head of equities for Fidelity Capital Markets who was appointed interim head of transition management, said Fidelity would continue to seek its push into defined benefit plans.
“We're actively looking for a permanent head of the group and we're going to continue to aggressively pursue business in the DB and DC transition space,” Mr. Donahue said in an e-mail.
Mr. Byrne's departure also sparked interest in where he might end up, whether with a rival transition management firm or if a new firm might enter the business by hiring him.
The sources said Mr. Byrne, who joined Fidelity after serving as a managing director for transition management at BNY ConvergEx, could end up at places like Macquarie Portfolio Solutions, Cantor Fitzgerald LP, BTIG LLC, Pavilion Financial Corp. and industry behemoths BlackRock Inc. and State Street Corp. “He has quite a few options,” one source said.
Some firms, like Macquarie, have built new transition management businesses by hiring leaders at other firms, as was the case in 2014 when Fred Fogg and Lance Vegna, directors and co-heads of transition management, left Credit Suisse after it closed its transition management business. But not all firms have the scale to start a new transition management unit, said Robert Holland, senior product manager at investment management software provider Linedata, Boston.
Mr. Byrne “has a broad-based view of the industry,” Mr. Holland said. “But in this business at that size, there are only so many seats to fill. ... He probably only has four to five places he can go. His choice could be to do the same old, same old at a big shop, which is in his wheelhouse, or start a niche business, which is very hard to do without scale. The industry is small. The State Streets and Fidelitys of the world have some kind of capital markets business that makes transition management a value-add for a few basis points less. The barriers to entry are high.”