San Francisco Chronicle - (Sunday)
Fidelity CEO made family firm an investment giant
Edward Johnson III, a publicity-shy Bostonian who transformed a small company created to manage the department store wealth of his Mayflower-pedigreed ancestors into one of the world’s biggest investment companies and the nation’s largest administrator of workplace retirement plans, died on Wednesday at his home in Wellington, Fla. He was 91. The death was announced on LinkedIn by his daughter Abigail, the current CEO of the firm, Fidelity Investments.
Johnson, widely known as
Ned, led FMR, Fidelity’s parent company, and drove it to prominence in the 1960s with heavily promoted, aggressively managed “go-go’’ stock funds. In 1974, the company helped popularize the fledgling money-market business by allowing customers to write checks against its money fund.
“They were the unquestioned industry leader,’’ John Bogle, founder of the archrival Vanguard Group, said several years ago in an interview for this obituary. (Bogle died in 2019.) Vanguard favored a more conservative market approach, less reliant on star portfolio managers,
Fidelity’s Edward Johnson III (left) appears with Jeffrey Immelt of General Electric at a Boston luncheon in 2002.
and eventually overtook Fidelity in assets under management,
Johnson’s exceptionally long tenure — he joined the family firm as a junior stock analyst in 1957 and presided over Fidelity into the 2010s, when he was in his 80s —
coincided with a huge expansion of industry products as well as assets, and he eagerly embraced technological advances to provide services that later became commonplace.
He first offered retail customers the ability to conduct transactions by toll-free telephone; he pioneered walk-in investor centers; and he revived, and then popularized, funds focused on specific industry sectors, like health care.
At his death, Fidelity had more than 500 mutual funds and $11.8 trillion under administration. The company, about half owned by the Johnson family and half by its other employees, had revenue of $24 billion and operating income of $8.1 billion.
Besides its huge stable of mutual funds — which included the Magellan Fund, managed by Johnson before Peter Lynch piloted it to superstardom — Fidelity’s businesses came to include a huge division administering 401(k) plans and maintaining other records for companies.