* Jacques Perold says fund bets paid off in 2009
* Perold: sometimes the best change is no change
By Ross Kerber and Aaron Pressman
BOSTON, Jan 20 Fidelity's new asset-management
chief styles himself a team player in a star system.
"I've been the encouraging soul on the side," said Jacques
Perold on Wednesday, explaining his position with managers in
one of his first interviews since being named in December to
run the company's more than $1 trillion asset-management
Such warm-and-fuzzy comments are hardly the norm at
hard-charging Fidelity, known for famous contrarian managers
like Peter Lynch.
Many of Fidelity's funds have posted mediocre returns in
the past decade as they grew large and unwieldy, but 2009
marked a solid turnaround, the company said in a presentation
released on Wednesday.
Some 74 percent of all Fidelity funds outperformed their
peers, up from 56 percent in 2008. Among its well-known equity
mutual funds, 66 percent beat their peers in 2009, up from just
36 percent in 2008.
In an interview at the company's headquarters in Boston,
Perold said investors should give Fidelity more credit.
"These results speak to the value of active management," he
said, defending his teams of stock-pickers against those who
maintain that lower-cost index funds deliver better performance
Perold acknowledged the bad times in 2008, which he blamed
on managers' failure to foresee the depths of the worst
financial crisis in decades.
"As 2008 was starting to happen it wasn't clear where it
was going to end. Cheap stocks got cheaper. It was a value
trap," he said.
But the company stood by nearly all its hundreds of fund
managers, replacing fewer than 20 and standing by brand-names
despite their stumbles.
He cited the example of Magellan manager Harry Lange, who
kept his post even after the fund, once the world's largest,
dropped 49 percent in 2008. Magellan, like many funds, turned
around in 2009, rising 41 percent.
"Sometimes the best change you can make is no change,"
Perold said. "The best thing to do was to keep them on the
Perold said Fidelity was using more "team-management"
strategies to arrive at investment ideas for some funds, as
well as investing more in foreign markets.
But he doesn't foresee changes to its main strategies.
"We'll always embrace the star system," he said.
Perold's comments were part of a three-part presentation
that Fidelity executives gave to journalists on Wednesday,
highlighted by news that President Rodger Lawson planned to
retire in March. [nN20177972]
Lawson leaves after a tumultuous period overseeing
Fidelity, but cited performance figures he said backed his
decisions to slash jobs, control costs, and allow Fidelity to
outpace asset-management rivals.
The performance of Perold's division was part of that
picture, Lawson and top financial executive Robert Chersi said.
In all, Fidelity's assets under administration stood at $3.2
trillion at the end of 2009, up from $2.6 trillion at the end
These included flows into Fidelity's mutual funds of $94
billion through September of 2009, which Fidelity said outpaced
all large rivals. For all of 2009 it said it had inflows of
(Reporting by Ross Kerber and Aaron Pressman; Editing