CEO's daughter rises at Fidelity

Johnson promoted to head funds arm, is in line for top job

May 22, 2001

BOSTON - Fidelity Investments yesterday named Abigail P. Johnson, the daughter of Chief Executive Officer Edward C. Johnson III, president of its money management arm, succeeding Robert C. Pozen.

Johnson, 39, whose grandfather founded what is now the largest U.S. mutual fund company, will become president of Fidelity Management & Research Co. on June 15. She has been an executive in FMR's equity division since 1997.

The appointment puts the younger Johnson in line to lead Boston-based Fidelity at a time when mutual fund sales are slowing due to lower stock prices. Fidelity manages more than $900 billion of assets, with mutual funds accounting for about 50 percent of its $11.1 billion in revenue last year.

"What it clearly means is that Abigail Johnson is at Fidelity to stay," said Jim Lowell, editor of Fidelity Investor, a monthly newsletter based in Needham, Mass.

Johnson, who has worked at the privately held firm controlled by her family since graduating from Harvard Business School in 1988, said she has no immediate plans to take over from her father, who is 70 years old.

"My father has no plans to retire, and I expect him to be around here for quite a while," she said.

Johnson will be taking over Fidelity's money management arm at a time when the fund industry faces challenges other than slowing sales. Aging baby boomers are demanding more customized products, such as privately managed or "separate" accounts, private equity investments and exchange-traded mutual funds.

"The fund industry is moving into a more mature phase," said Ryan Tagal, a senior analyst at Cerulli Associates Inc., a Boston-based research and consulting Boston. "People want something more [in] their retirement portfolio."

Johnson said the performance of Fidelity funds will be her first priority as president of FMR. "That is what matters the most in this business, that will always be my first priority."

Fidelity's equity funds have declined by 0.87 percent this year, slightly more than the 0.62 percent drop in the Standard & Poor's 50 Index but less than the 3.5 percent fall in the average stock fund tracked by Bloomberg.

The younger Johnson owns a 24 percent stake in the firm, and ranks as the 18th-richest American, with an estimated net worth of $10 billion, according to the Forbes 400 list of billionaires.

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