Fidelity Fund Manager Lineup Undergoes Broad Revamp

Fidelity Investments is changing managers of 26 equity mutual funds, the broadest reshuffling of the firm’s stock-picking group in its 50-year history.

The reorganization affects some of the firm’s most widely held funds, including the $16.7-billion Puritan Fund and the $14.8-billion Asset Manager Fund. Jeffrey Vinik, manager of the flagship $56.5-billion Magellan Fund, is not affected, the company said.

Fidelity said the changes are not tied to the lagging returns of some of its biggest funds over the last year and that all managers affected by the changes have been reassigned, except one, Daniel Frank.

Analysts said recent fund returns had to play a role in some of the changes. “This is a major realignment,” said Eric Kobren, executive editor of Fidelity Insight, an independent newsletter that tracks the nation’s biggest fund group.

“The changes add a little more bureaucracy, and there’s no denying that some managers who haven’t performed are affected,” Kobren said.

Bob Beckwitt, for instance, was replaced as manager of Fidelity Asset Manager, a fund he had overseen since 1988, Kobren said. Beckwitt will now oversee the firm’s $2-billion wrap fee business, as well as work on developing new funds for the institutional retirement market.

Richard C. Habermann was named new head of Asset Manager, including its growth and income portfolios, which invest in a mix of stocks and bonds. He will be assisted by veteran stock fund manager George Vanderheiden and bond fund managers Michael Gray and Kevin Grant.

“Our goal is to maximize Fidelity’s strong research and management skill and apply them to our Asset Manager funds,” said William J. Hayes, director of Fidelity’s $253-billion equity investments group.

As part of the reorganization, the mutual fund giant is realigning its equity group into eight investment departments, from four. Each will have a group leader who will be responsible for overseeing investments, reviewing portfolios and evaluating personnel.

“Over the years, the Fidelity equity organization has evolved from two to four and now eight groups,” Hayes said. “The size and scope of our investment operation enables us to do this and helps to position Fidelity for the future development of our business.”

Fidelity’s revamp of its equity group is similar to the restructuring of its bond fund group last summer, Kobren said. Fidelity’s equity group includes 41 portfolio managers and 153 research analysts.

Among the more notable manager changes was Fidelity’s decision to switch managers of its Puritan and Value funds. Bettina Doulton was named head of Puritan and Rich Fentin was named manager of the Value Fund, the company said. Most of the manager changes are effective April 1.

Steve Peterson was named to replace Bob Haber as manager of the $4.9-billion Balanced Fund and Michael Gordon was appointed to succeed Harris Leviton as manager of the $4.1-billion Retirement Growth Fund, the company said. Harry Lange was named manager of the $1.7-billion Capital Appreciation Fund, succeeding Tom Sweeney.

Daniel Frank was removed as manager of the $630-million Fidelity Advisor Strategic Opportunities Fund. The company said he’s the only manager who wasn’t reassigned.