February 21, 2014

Fidelity’s Morrison to Succeed O’Hanley as Investment Chief

Charles Morrison most recently was head of Fidelity’s $750 billion fixed income division

Fidelity Investments, the mutual fund firm best known for its star stock pickers since it was started almost seven decades ago, named former bond manager Charles Morrison to run its asset management unit.

Morrison, 53, who joined Fidelity in 1987 as a bond analyst, most recently was head of Fidelity’s $750 billion fixed-income division, the Boston-based company said Thursday in a statement. He will succeed Ronald P. O’Hanley, who said in January he will step down from his role at the end of this month.

Morrison has taken the top asset-management role at Fidelity as it is losing ground to rivals and as the firm continues to shift emphasis to its recordkeeping, retirement and brokerage businesses. Clients withdrew a net $1.1 billion last year from Fidelity’s money-management unit, which has $1.94 trillion in assets. Vanguard Group Inc., the biggest fund firm, drew $138 billion in new client money in 2013, according to spokesman John Woerth, and BlackRock Inc., the world’s largest money manager, attracted $117 billion.

“This is a gigantic financial-services company, but if the funds aren’t doing well, it colors the view of the whole organization,” John Bonnanzio, editor of Fidelity Monitor & Insight, an investor newsletter based in Wellesley, Massachusetts, said in a telephone interview. Bonnanzio said Morrison, whom he spoke with today, intends to make investment performance his main focus.

Morrison wasn’t available for an interview, said Vincent Loporchio, a spokesman for Fidelity.

Administered Assets

The money Fidelity manages for clients rose 15% to $1.94 trillion in 2013, as the Standard & Poor’s 500 Index of U.S. stocks rallied 30%. Fidelity’s assets under administration, which include less profitable businesses such as recordkeeping for retirement plans, jumped 19% last year to $4.62 trillion after adding $126.9 billion in client money.

“Charlie’s diverse experience during his 27 years at Fidelity positions him well to advance our asset-management business by continuing to deliver strong, consistent performance across all asset classes, sharpening our global investment focus, and offering innovative products that help deliver better outcomes for our clients,” Fidelity President Abigail Johnson said in the statement.

U.S. stock and bond mutual funds as a group attracted $153 billion in 2013, according to data compiled by the Investment Company Institute in Washington.

Tsai, Lynch

Fidelity, founded by Edward C. Johnson Jr. in 1946, was best known for decades as home to top stock pickers such as Gerald Tsai and Peter Lynch. Lynch ran the Magellan Fund for 13 years through 1990, returning an average of 29% annually.

Fidelity has strengthened the communication and collaboration between its equity and fixed-income investing divisions in recent years, making Morrison’s appointment less surprising than it would have been in the past, Fidelity Monitor & Insight’s Bonnanzio said.

“He’s precisely the kind of person they need in that group,” Bonnanzio said. “He’s someone everyone there will respect because he’s one of their own.”

Morrison, who earned a bachelor’s degree from Dartmouth College and an MBA from Harvard Business School, became a mutual-fund manager in 1995. He was named president of the fixed-income division following the death of Boyce Greer in a kayaking accident in 2011.

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