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BOSTON -- Fidelity Investments yesterday promoted its top lawyer, Robert Pozen, to head the firm's $470 billion mutual funds group after a year when performance sagged and managers of some of its biggest funds defected.

Pozen, 50, will succeed J. Gary Burkhead as president of Fidelity Management & Research Co., which oversees Fidelity's 253 funds.

By picking Pozen, Fidelity went outside the ranks of its fund managers and research staff to fill a position that is crucial to rebuilding investor confidence in the No. 1 U.S. mutual fund company.

Pozen, a 10-year Fidelity veteran, has never managed a fund. He's best known for helping oversee the Boston-based firm's relations with the U.S. government and policing its internal regulations.

"Pozen doesn't have the investment experience but he has been [Fidelity Chairman] Ned Johnson's 'fix-it' man in the past," said David O'Leary, president of Alpha Equity Research Inc., a research firm in Portsmouth, N.H.

Johnson said in a statement that Pozen has "extensive experience with our investment operation and an in-depth knowledge of the mutual fund industry."

Pozen said he is already involved in evaluating the performance of Fidelity fund managers and helping build the company's investment business in Japan. He's also helped introduce two closed-end investment funds and revised regulations that restrict personal trading by portfolio managers.

"I have been involved on a day-to-day basis with portfolio managers on a broad variety of issues such as proxy fights and evaluating securities in the funds," Pozen said.

"The most important thing in this job isn't stock-picking and bond analysis, it's managing people, getting them technical support and representing them in getting their needs met by the Fidelity organization," he said.

Pozen said Fidelity "has gone through some tough times, and we've taken the hard decisions to be well positioned for the future."

In recent weeks, Pozen was under consideration by President Clinton to become deputy U.S. trade representative for Asia. Pozen said his name was withdrawn from consideration.

During Burkhead's tenure, Fidelity's mutual fund assets ballooned to almost $500 billion from $50 billion. After nearly 11 years of running the mutual fund group Burkhead, 55, is stepping aside to fill the newly created position of vice chairman of Fidelity's parent, FMR Corp.

Burkhead also will serve as chief executive of the company's institutional businesses, which is the fastest growing part of Fidelity's operations. His new duties will include overseeing Fidelity's retirement business, international institutional operation and brokerage unit.

Many of Fidelity's leading funds trailed badly last year and continued to do so this year. Just 12 of Fidelity's 41 diversified U.S. stock funds beat their benchmark fund group in 1996, according to Morningstar Inc.

Fidelity's flagship Magellan Fund has suffered about $8.7 billion in net outflows since former manager Jeff Vinik resigned in June, according to Fidelity Insight, an independent group that tracks the company. Most of that money was diverted to other Fidelity funds.

Pub Date: 4/22/97

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