SHORT INTERESTS: TIPS, TRENDS, OBSERVATIONS

Headhunter hunted

Highland Search Group LLC, a New York financial services recruiting firm, was unable to agree on a merger with a London headhunter — but subsequently hired several of its top brass.

The firm opened an office in London last month, its first outside the United States, after deciding not to merge with Rose Partnership when some key staffers left. One of the former Rose partners, Susan V. Cummings, will now run Highland’s London outpost.

Rose’s chief operating officer, Michael Byrne, says the firm was discussing combines with Highland and two other U.S. firms last year, but called off talks because “the economics of a transatlantic link-up didn’t make sense at the time.” He says several partners have left in recent months for various reasons — in Ms. Cummings’s case, disagreement over “how the business ought to develop.” Ms. Cummings declined comment. “A lot of our (clients) have offices in both countries. This gives us a gateway into European recruiting efforts as well,” says Highland partner Michael Castine.

Fidelity wants prime cuts

Fidelity Investments is beefing up its already beefed-up efforts to woo wealthy investors. It plans to promote heavily a special tax advisory service available to clients of its Portfolio Advisory Services, where for a $200,000 minimum Fidelity will handle all mutual fund investment decisions and account management. The special tax service, an option available only to customers with at least $500,000 in their accounts, goes one step further by incorporating tax-sensitive investment strategies. While the special service was introduced in late 1996, the company has never promoted it. “We’re refocusing our strategy a little bit,” a Fidelity spokesman concedes. Nevertheless, Portfolio Advisory Services has attracted about $7 billion, of which just $600 million belongs to customers of the tax advisory service.

More than skin deep

There’s more to Victoria’s Secret than the silk and lace underthings the Intimate Brands Inc. company is known for. Sure, Victoria’s got plenty of attention for its recent Internet fashion show, but portfolio managers tell InvestmentNews sister publication Pensions & Investments that unlike so-called .com stocks, Intimate Brands can immediately leverage the Internet into increased sales.

“The whole fashion show was a brilliant idea,” raves Drew Cupps, whose aggressive growth mutual fund at Strong Capital Management Inc. in Menomonee Falls, Wis., owned 740,000 shares as of Sept. 30.

“The whole idea of Internet stocks will slowly disperse and (become) a moot subject,” he says, as the Internet becomes a tool for all companies to use or not use. Intimate Brands is in a better position than most, he says, because branding is key on the Net — consumers can’t actually hold the product.