Fidelity Drops Goldman by Bringing Securities Lending In-House

Fidelity Investments is cutting out its middleman -- Goldman Sachs Group Inc. -- when dealing with Wall Street short sellers.

The money manager is bringing its stock-lending business in-house, according to a March 29 regulatory filing, instead of paying Goldman Sachs to run it. According to filings, the bank received about 10% of the revenues generated by Fidelity’s lending, primarily to firms that borrow stocks to bet against them.

Fidelity, which managed $2.7 trillion of assets in March, plans to use some of the savings from the switch to boost returns in the funds that lend securities, particularly index trackers ...