Fidelity reshuffle boosts Abigail Johnson
Fidelity Investments, the giant mutual fund firm, has shuffled top management, expanding the duties of Abigail Johnson, the daughter of its chief executive, and hiring a top Bank of New York Mellon Corp executive to run its asset-management business.
The changes, announced on Monday, are the latest at the firm as Fidelity's chief executive, Edward C. Ned Johnson III, approaches his 80th birthday in June with no public succession plan in place at the family-controlled business.
The shifts suggest Abigail Johnson, 48, could be closer than ever to taking the top spot at the Boston-based firm.
She will continue to oversee the company's big retirement and personal investing business, and is vice chair of the parent company's board.
Fidelity said Abigail Johnson now will also oversee distribution arms including its Institutional Services wing, whose clients include broker-dealer firms, investment advisers and banks.
Ronald O'Hanley, 53, who currently heads BNY Asset Management, will run Fidelity's Asset Management and Corporate Services unit, taking over at midsummer after he leaves his current post.
As presidents of their respective units, both executives will report directly to Ned Johnson, Fidelity said. That will make O'Hanley senior to Jacques Perold, who will continue running Fidelity's big mutual fund unit FMR Co and report to O'Hanley.
A spokesman said O'Hanley will also be responsible for areas like legal and government-affairs, freeing up Perold. It allows Jacques to focus exclusively on FMR Co, said company spokesman Vin Loporchio.
Reiterating past comments, Loporchio said Fidelity has a succession plan in place to ensure a smooth transition should one become necessary.
He declined to give more detail except to say Ned Johnson is actively involved in running the company every day and has no immediate plans to retire.
Ned Johnson has made a tradition of cycling through top executives without elevating any to run the business begun by his father. The company reported profit of $2.5 billion on revenue of $11.5 billion for 2009 on $1.5 trillion in assets under management at year-end.
The most recent departure was Fidelity President Rodger Lawson, who stepped down in March after steering the firm through the recent global financial crisis and stock market slide with profits intact, at the cost of thousands of layoffs.
John Bonnanzio, who edits a newsletter for Fidelity investors, called Monday's moves a bit of a curveball. It marked another missed chance for Ned Johnson to take a step back from the front lines of running Fidelity.
Bonnanzio said he would expect Abigail Johnson eventually to run the company, especially given her ownership of many of its shares.
While Fidelity is best-known for its mutual funds, in recent years more of its business has become tied to other financial services.
A lot of people think if you sit atop the funds business you sit atop the firm, and I don't think that's the case here, Bonnanzio said. This is a classic Fidelity reorganization, shuffling the decks.
None of the executives would grant interviews on Monday.
In a rare public speech in Miami in February, Abigail Johnson struck the theme Bonnanzio mentioned.
We at Fidelity view ourselves just as much a financial information processing company as an investment management firm, said Johnson, whom Forbes ranked No. 17 among the richest Americans in 2009 with a net worth of about $11.5 billion.
BNY Mellon said in a statement that upon O'Hanley's departure its asset management unit will be run by jointly by Jonathan Little, now a vice chairman at the company, and by Mitchell Harris, chair of the company's fixed income, cash and currency group.
(Reporting by Ross Kerber; Editing by Steve Orlofsky, Phil Berlowitz)
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