Abigail Johnson to Be President of Fidelity Management Unit

Privately held Fidelity Investments, the nation’s biggest mutual fund company, on Monday named Abigail Johnson to succeed Robert Pozen as president of its money management arm, Fidelity Management & Research Co. Some analysts said the move could shake things up at the Boston firm.

Johnson, 39, the daughter of Fidelity Investments’ Chairman and Chief Executive Edward C. Johnson, will succeed Pozen, 54, on June 15, and she is expected to eventually take over for her 70-year-old father. Pozen, who took the helm at FMR in 1997 amid turmoil and a slew of portfolio manager defections, will leave at the end of the year “to pursue other interests,” according to Fidelity.

“Pozen did a wonderful job stabilizing the ship, but he slowed it down too much,” said David O’Leary, president of Alpha Equity Research, a New Hampshire investment firm. “[Abigail Johnson] needs to speed it up again.”

Fidelity, which manages more than $900 billion of assets, has been losing market share amid mediocre investment performance, O’Leary said. In the last five years its share of equity fund assets has slipped to 15% from 20%.

“Pozen’s whole approach was to reduce risk. Now they need to take more risk in order to improve performance and bring in more assets,” O’Leary said.

Pozen has tightened the reins by making sure portfolio managers keep sector weightings in line with the indexes their funds are being measured against, adhere to their style mandates and stay invested rather than use cash as a tactical or market timing tool. In effect, many of the funds, including $87-billion flagship Magellan, have become quasi-index vehicles, he said.

But some analysts have applauded Pozen’s leadership.

“Pozen leaves Fidelity in much better shape than he found it,” Morningstar analyst Russel Kinnel wrote Monday in a commentary.

Kinnel contended that the management switch is unlikely to produce any “dramatic changes,” noting that Johnson has been at Fidelity for 14 years. Johnson has been an associate director and senior vice president of FMR’s equity division since 1997.