Edward “Ned” Johnson III, who turned Fidelity Investments into a financial giant and opened Wall Street to millions of Americans, died Wednesday. Johnson was 91 years old.
“He died peacefully in his family-enclosed home in Florida,” Fidelity CEO Abigail Johnson, who took over as chairman in 2016, wrote in a LinkedIn post Thursday. increase.
Johnson died of natural causes in Wellington, Florida, according to a Fidelity spokeswoman.
Johnson inherited the famous Boston company from his father in the 1970s as investors slipped through the bear market, which weakened the market enthusiasm and investment trusts sold by Fidelity. While many of Fidelity’s competitors were founded, Johnson pushed the company to rebuild through a series of new ventures.
Fidelity was the first to offer a money market fund that allows investors to write checks on their holdings. The company created and promoted toll-free numbers. (Johnson also helped create an ad copy.) Fidelity has set up its own discount broker to expand its reach among private investors and expand overseas. Under Johnson’s supervision, Fidelity has also built the country’s largest 401 (k) business, helping millions of people save for retirement.
His enthusiasm for stocks, and the talent of marketing star managers such as Peter Lynch, helped rekindle many Americans’ love for the market.
Joshua Berman, Johnson’s longtime legal counsel, said:
Many of the initiatives also show that they may be Johnson’s most lasting legacy, according to executives who worked with him. , Former Fidelity President.
Fidelity ended in 2021 and had assets under its control of $ 11.78 trillion, or in Fidelity’s accounts and fidelity funds held by rival clients. The amount under management of the company, or Fidelity’s fund, has increased from $ 3.8 trillion in the previous year to $ 4.48 trillion in total.
Fidelity has grown into a financial giant, but, like Johnson himself, remained fiercely private. Johnson controls 49% of Fidelity’s parent company, FMR Corp.
The wealthiest man in Boston lived for nearly half a century in the same Beacon Hill Townhouse, just a short walk from Fidelity’s old office on Devonshire Street. He has donated to dozens of institutions that support art and medical research, but there are no museums, hospitals or libraries bearing his name.
Johnson shared his father’s interest in Asian culture and trekked Japan and China for over a month each year.
Young Johnson was an important art collector with a particular interest in New England furniture. For years, he took a flashlight and examined the fittings of Chippendale’s work he came across.
Johnson and his daughter Abigail Johnson were in 2004.
Photo: Brooks Craft / Corbis / Getty Images
He founded the Brookfield Arts Foundation, owned hundreds of grandfather’s watches, disassembled an entire two-story house in China, and brought more than 2,000 to a museum in Salem, Massachusetts.
“He was a very rare man,” said legal counsel Berman. “He was passionate about everything.”
Johnson is surviving by his wife Elizabeth, three children, Abigail, Elizabeth, Edward, and seven grandchildren.
“He loved family, colleagues, jobs, the stock market, art and relics, tennis, skiing, sailing, history, and good discussion,” writes Abigail Johnson. “He can be expected to have a contrarian view of almost anything.”
Edward Crosby Johnson III was born in 1930. He grew up in the Brahmin outskirts of Milton, Massachusetts, where his grandmother raised his family.
With its roots in Boston dating back to the 17th century, Johnsons had a wealth and fame long before Fidelity was founded in 1946 by the father of a trained lawyer, Johnson. He imbued his son with the same lifelong charm.
According to an article in Boston magazine, Edward Johnson once told his assistant after taking a walk with his little boy, “I’m learning a lot about mediation, but don’t tell Ned about it.”
Associates and colleagues said the young Johnson was suffering from dyslexia and was bouncing around several prep schools before heading to Harvard University.
“Reading was very difficult for him,” said former Fidelity President James Carvey. “But he was very visual.”
Ned Johnson, left, General Electric CEO Jeffrey Immelt, 2002.
Photo: Chitose Suzuki / Associated Press
At a meeting with his adjutant, Johnson disassembled and reassembled the stapler. A few years later, when he struggled to explain what he wanted to see Fidelity’s first website, he cleared the calendar and worked with the company’s software engineers for six weeks, Carvey said.
After spending two years in the Army, Johnson briefly returned to Boston at State Street Corporation. Johnson joined his father’s company in 1957 as an analyst working with Gerald Tsai, then Fidelity’s top manager.
By the 1960s, Johnson’s investment had begun to outpace other growth stock funds, including Tsai. Johnson was the first manager when Fidelity launched its future flagship fund, Fidelity Magellan, in 1963.
When Johnson became president of the company in 1972, Fidelity managed $ 3.9 billion in assets. Most of them were equity funds, draining money until the market began to recover 10 years later.
Fidelity made its first direct contact with Main Street in 1974 with the provision of a new money market fund. The company launched a securities company in 1978 and began selling retirement accounts to US companies in 1982. In 1995, Fidelity became the first major investment company to have a website.
These steps will also foresee a drastic change in the way Americans invest. Fidelity used a class of voluntary investors who didn’t have to tell the broker where to put the money.
Johnson invested heavily in technology and installed a generator under the sidewalk of Fidelity’s office tower to keep the company from losing power. According to Fidelity’s former president Bob Reynolds, he rarely hesitated to share his views with tech celebrities such as Microsoft co-founder Bill Gates.
Johnson also entwined (usually behind the scenes) with politicians over taxes. As Fidelity expanded, he sought to move his company and employees to offices outside his home country. His family office set out for a more generous tax law in New Hampshire.
For Johnson, the idea was flowing in a Staccato rhythm. Some have worked and some have failed. Fidelity was family-owned. There were no public shareholders or quarterly reports limiting his horizons and imagination, and few critics blamed the company for its failure.
“I don’t think we’ve ever had a strategic plan,” said Peter Lynch, Fidelity’s former star manager.
At the end of the day, Johnson constantly visited Lynch’s office frequently to pick his brain. “I had the code,” Lynch said. “I called his wife and asked,’What’s the supper?’ That meant Mr Lynch would miss the train at 6:15 pm or more.
The conversation lasted for decades. “We’re talking about Tesla, or Apple now,” Lynch said in 2018. “That’s the same question he asked 50 years ago.”
Johnson’s father died in 1984. “I’ve never seen a father and son so close,” Reynolds said. “He once went to his father’s office and spent four hours there, and all they had to do was talk about the market.”
Johnson’s daughter Abigail joined Fidelity in 1988.
She steadily climbed and wanted to stamp Fidelity with herself. In 2004, Ms. Johnson sought to vote for her father from her own standpoint over some business decisions that were inconsistent. After he knew it and issued enough shares to dilute his children’s ownership in the family business, the plan failed, people familiar with the matter said.
But after the dust broke out, people said he formed a committee of three to work on the company’s succession plan. It’s been another ten years before Johnson is ready to hand over his work to his daughter.
Due to the market recovery after the financial crisis, many investors were fascinated by the returns of active funds and the higher fees they charged. Fidelity has been hampered as the industry has shifted to lower-cost index funds. Johnson was reluctant to accept the oncoming changes. He eventually launched an index fund and offered other passive funds to brokerage clients, but “I don’t think he believed it,” Reynolds said.
Johnson wasn’t in the limelight after his retirement.
“I’m proud of what we’ve built, and just as proud of what Fidelity has been,” Johnson said in a January 2022 statement to The Wall Street Journal. rice field. “The focus was on the customer from the beginning, and that’s still the case today.”
At a 2012 dinner in honor of Johnsons, Johnson saw her daughter talk about a family dinner interrupted by a Fidelity customer. She said her father would always receive those calls.
Ned Johnson was “a man consumed with passion and endless energy to fix things,” she said.
Write to Justin Baer ([email protected])
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