Global group Fitch has introduced a novel scheme to enable its US business and staff to invest in Fitch clients.
A managed equity fund has been set up comprising ten of the group’s publicly quoted US clients. Fitch’s US operation has invested 68 000 in this “Fitch fund”, which is managed by independent financial consultant Cambridge Financial Group in the US.
US staff will be able to have bonuses and pension premiums invested in the fund if they wish.
The ten companies in the pool will be reviewed by CFG every six months in line with the way that mutual funds or unit trusts are managed. Fitch has 84 public companies on its books in the US, including Wolverine Worldwide, Iomega and Digital.
The move follows research by CFG and Paine Webber for Fitch which showed that the consultancy’s US clients were outperforming companies not using Fitch. The five-year average for stock prices was 40.8 per cent growth for Fitch clients compared with the 14.1 per cent achieved by companies listed on the Standard & Poor 500 Index.
“For years we’ve been trying to work out how to show measurable results for what we do,” says Fitch chief executive Martin Beck. “This is one way to validate the statement that ‘design pays’.”
He says the results “are good for us and for the design profession”, admitting “we’d like to make money out of this”. The concept is acceptable under US law, he adds, in that Fitch does not buy or sell stock and the fund is managed by an independent agent.
Fitch is looking to extend the concept to its offices in London, Europe and the Far East and is exploring the legal implications in those areas.