ONE of the biggest fund management operations in the world Fidelity Investments, is to establish a technology centre in Dublin creating 400 jobs within five years.

The announcement follows reports over the weekend that US bank Citibank plans to set up its European administration headquarters in Dublin, creating 700 jobs.

Fidelity was targeted by the Industrial Development Authority as part of a drive to attract the world's top financial services companies to set up their back office operations in Ireland. Some 100 companies have been targeted and the IDA said there was potential for at least 5,000 new jobs from this sector in the short to medium term.

Announcing the Fidelity decision, the Minister for Enterprise and Employment, Mr Bruton, yesterday described the response to the IDA drive as "extremely encouraging". He said he expected to be able to make further announcements in this sector before the end of the year.

The Fidelity operation will be located in Europa House in Dublin's Harcourt Street. It will consist of computer software and technology development centres. The new company, Fidelity Ireland, expects to employ 260 skilled workers over the next three years, building to 400 people within five years. The company has started recruiting software engineers. Fidelity Investments is a US company, based in Boston, with £300 billion of funds under management.

The IDA is targeting top financial services companies which have administrative operations in a number of European countries. It has made approaches to the head offices of companies through subsidiary operations located at the International Financial Services Centre.

The IDA marketing pitch is that these companies could cut their administrative costs by up to one third by centralising theirs back office/administrative functions in Ireland. The IDA is arguing that in a European Single Market there is no logic in major financial services groups having separate back office operations in a number of European countries. Major companies outside the financial services sector are also being invited to consider putting some of their administration functions into Ireland.

The Fidelity decision to locate in Ireland comes just after the collapse of Taylor Asset Management Group. The Taylor Group had the "master agency" for Fidelity in Ireland. Taylor directed investments to Fidelity and was paid a commission. Fidelity terminated its agreement with Taylor in July.