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A shake-up at Fidelity
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February 18, 1998: 5:39 p.m. ET
Mutual fund giant will redistribute its equity assets among more managers
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NEW YORK (CNNfn) - Fidelity Investments will shake up the management of several funds and spread the control of its equity assets more widely.
The dispersion of control is part of a new corporate strategy laid out by Fidelity's chief executive and chairman, Robert Pozen. Some funds have ballooned in recent years, leaving Fidelity's money managers in charge of large amounts of capital.
Boston-based Fidelity, the nation's largest fund family, managed a total of $606.6 billion in assets at the end of 1997.
As part of the moves, veteran fund manager George Vanderheiden will reduce his role -- from six major funds down to three -- to lighten his workload and allow up-and-coming fund managers to take charge.Those six funds had total assets of more than $43 billion at the end of 1997.
"Over the years, George has been one of the most successful equity portfolio managers in the financial services industry," said Pozen in a statement.
Vanderheiden will hand over responsibility for the Destiny II fund, and the equity portions of Asset Manager, Asset Manager-Growth and Asset Manager-Income.
He will focus on three funds: Fidelity Advisor Growth Opportunities, Variable Insurance Products Fund III: Growth Opportunities Portfolio, and Destiny I.
"His desire to focus on specific core funds has given me the opportunity to redistribute assets to managers whose talents warrant larger assignments," Pozen said.
Analysts say Vanderheiden, who was recently named to the board at Fidelity, will likely take on the role as a mentor for younger managers.
"Fidelity seems to be thinking along the lines of preserving his stock-picking skills, giving him some time to do some nurturing and letting younger managers tap his knowledge base," said Jack Bowers, editor of Fidelity Monitor, an independent newsletter based in Rocklin, Calif.
"Running six different funds is more than a 9-to-5 job," Bowers added.
Beth Terrana, manager of the Fidelity Fund and the Fidelity Advisor Growth & Income Fund, will succeed Vanderheiden as portfolio manager at Destiny II. Thomas Sprague takes over as sub-portfolio manager for the equity portions of Asset Manager Fund and Bradford Lewis will be the new sub-portfolio manager at both Fidelity Asset Manager-Growth and Fidelity Asset Manager-Income.
Analysts said the departure of Vanderheiden may signal a more aggressive approach at Asset Manager-Growth and Asset Manager-Income.
Lewis is a quantitative manager given to conducting computer-based analysis rather than the "kick-the-tire" approach of Vanderheiden, said Eric Kobren, executive editor of Fidelity Insight newsletter in Wellesley Hills, Mass.
"The funds potentially will become modestly more aggressive," he said, adding, "we'll have to wait and see."
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Fidelity
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