When Robert Pozen steps down as president of Fidelity Management & Research Company of Boston June 15 and Abigail P. Johnson takes over as president of one of the argest money managers in the world, a fundamental change in leadership style is likely to occur, according to industry analysts.

As the new president, Johnson is likely to try to loosen the tight rein of control that Pozen has held over the firm's portfolio managers but she will have to do so without compromising some of the valuable changes Pozen made while president, according to industry analysts.

Before Pozen, 54, was named president in 1997, Fidelity's portfolio managers had free rein to invest more or less how they wanted, said Eric Kobren, executive editor of Fidelity Insight, a newsletter based in Wellesley, Mass. which tracks Fidelity funds.

Pozen was given the task of cleaning up an investment management business that was disorganized and inefficiently managed, according to Kobren. Managers had no clear investment parameters and the firm suffered several key defections as managers left to work for hedge funds, he said. And, whenever one manager decided to leave, a chain reaction of manager shifts was set off because, prior to 1997, managers were assigned funds based on their tenure and internal politics, he said.

Pozen took a no-nonsense approach to running the business and his former role as general counsel to the firm gave him the authority that was needed to bring the portfolio managers under control, according to Kobren.

"He definitely turned things around," Kobren said. "There is lower turnover as a result of him establishing a more cogent investment process and making fund managers responsible for operating within a defined parameter." Manager changes are also now based on experience, not tenure or politics, he said.

Although Johnson probably will not give portfolio managers total autonomy over the funds they manage, she is likely to give them more leeway than Pozen gave them on decisions like sector bets and levels of cash held in their funds, according to Russell Kinnel, director of fund analysis at Morningstar of Chicago.

"I could see her loosening the reins a little bit," he said.

Moreover, Johnson's experience in investment management will probably have an effect on her leadership, he said. Whereas Pozen has worked to impose limits on how portfolio managers invest, Johnson's role with the company has always been to help investment managers do their jobs rather than impose limits, according to Kinnel.

Johnson, 39, is the daughter of Edward C. Johnson 3d, chairman and CEO of Fidelity Investments. She started with Fidelity in 1988 as an analyst and portfolio manager and became the associate director and senior vice president of the company's equity division in 1997. She is a director of FMR Corp. and a member of the board of trustees of Fidelity's funds, according to the company. She is also responsible for Fidelity's Specialized Growth funds and oversees the activities of the firm's growth and capital appreciation equity groups.

Johnson's career background contrasts starkly with Pozen's. Pozen had been the firm's general counsel before being named president by Edward C. Johnson 3d.

But Fidelity's performance under Pozen's leadership improved markedly. Managed assets climbed more than 75 percent from $518 billion to $900 billion in the four years that he was president, according to Fidelity. When Pozen assumed the presidency in April 1997, Fidelity's equity funds ranked in the fiftieth percentile of all equity funds on an asset-weighted basis, according to Fidelity Insight. As of April 30, 2001, Fidelity's equity funds ranked in the sixty-fifth percentile on an asset-weighted basis.

Johnson has said that as president of the company, one of her goals is to improve Fidelity's performance. In order to do that she will need to attract and retain key talent and carefully handle the large egos that are part of any investment management team, Kobren said.

The environment at Fidelity is bound to change because Johnson understands from experience the challenges of managing money, according to Burton Greenwald, president of BJ Greenwald Associates of Philadelphia, a mutual fund consulting firm. Unlike Pozen, Johnson is likely to be perceived by Fidelity's portfolio managers as an ally and not someone who is there to enforce rules, he said.

However, Johnson needs to be careful not to be too collegial with her investment managers, according to Roy Weitz, a financial advisor and publisher of FundAlarm.com, a website that tracks manager changes in the fund industry.

"I think that's an issue with Abby Johnson," he said. "She's a very nice person and you wonder if you really want a nice person in this job. Pozen has the ability to scare some of those big egos."

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