The Fidelity Select Biotechnology Portfolio bought about 1.5 million Adaptimmune shares the month after the IPO. But the biotech fund paid at least 24 times more for its shares than rivals did, Fidelity Select disclosures show.

As pre-IPO investors, F-Prime and the rival SmallCap World Fund got their Adaptimmune common stock, on a converted basis, for about 59 cents each, disclosures show.

The exact amount paid by the Fidelity biotech fund was not disclosed. But it was at least $14 a share, which was the low point for Adaptimmune shares the month of the IPO.

Adaptimmune traded recently at nearly $7 a share, which represents a big loss for the mass-market Fidelity biotech fund but a rich gain for the Johnsons' F-Prime.

PILING IN

In the six cases Reuters examined where Fidelity bought into investments that were already held by F-Prime, Fidelity funds became the largest or one of the largest shareholders.

In general, newly minted public companies need long-term shareholders such as mutual funds in order to ride out the ups and the downs of the stock market, especially right after a public debut, said Bob Ackerman, founder and managing director of Allegis Capital, a venture firm based in San Francisco.

An investment by Fidelity - the third-largest mutual fund firm in the United States - is a boost for any new public company. A big fund's investment broadens the shareholder base and makes it easier for venture capital investors to exit their investment at a profit.

"It's a validation of the company and the exit strategy, especially if it's a huge amount," said Hans Tung, managing partner at GGV Capital. "It's a good validation that a company has a lot of long-term growth potential ahead."

Fidelity said there has never been a situation where F-Prime has directed a Fidelity mutual fund to make an investment in one of F-Prime's portfolio companies.

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