Richard "Rick" Mace, the new head of Fidelity's international investments group who just took the helm of the $2.6 billion Fidelity Overseas fund, is largely unknown to outside observers.
The flagship international fund, Fidelity Overseas, is only one of four funds Mr. Mace will head; he also will manage Fidelity Advisors Annuity Overseas fund, Fidelity Advisors Overseas and VIP Overseas funds. In addition, Mr. Mace will be sole manager of the Global Balanced fund, without the assistance of former co-manager Bob Haber.
As part of a series of changes to Fidelity's equity funds, former manager John Hickling will manage only one fund as of April 1: International Growth & Income. Mr. Hickling had managed the now $967 million fund until Nov. 1, 1993, when Mr. Mace took over.
Some mutual fund industry experts are puzzled as to why Fidelity is giving someone with less than a three-year track record managing any one fund such a broad mandate.
"I'm kind of scratching my head," said Jeffrey Roberts, managing director of Trendline Research & Management, Richmond, Va., an investment adviser that uses mutual funds.
"Since early 1994 he's been running International Growth & Income which is by no means a stellar performer....Honestly, I can't give you a good reason why him and why now," Mr. Roberts said.
Jeff Kelley, senior editor of Morningstar, said Mr. Mace is "not only taking over one fund, but four of the five funds Hickling was running and taking over the international group. They are clearly dissatisfied with Hickling's performance. Mace is getting a shot at it. But (Mace) has not as much of a record on the fund side to go with."
Under Mr. Hickling, Fidelity Overseas - which is heavily used by defined contribution plan participants - ranked in the 40th percentile of international stock managers tracked by Morningstar for the three years ended Dec. 31. Fidelity Overseas has ranked in the upper half of Morningstar Inc.'s foreign funds group in terms of trailing three- and five-year returns with a three-year average annual return of 14.3%.
International Growth & Income's three-year average annual return was 12.43%. Of course, INGI, which Mr. Mace has run since November 1993, is not easily comparable because it included a portion in fixed income.
"The three-year average on that fund (International Growth & Income) is certainly lower than Overseas under Hickling's tenure. There has got to be more going on there than each guy's performance on the funds," Mr. Kelley said.
"It's kind of a surprise move. Hickling's a name, you know," Mr. Kelley said.
Mr. Roberts said "I think Hickling was a very capable manager. He made the most of a good market in 1993. International managers have not had a lot to work with in the two years since then."
But Eric Kobren, executive editor of Fidelity Insight, an independent newsletter in Wellesley Hills, Mass., said: "I don't see Hickling's performance as being anything to write home about. (The change) may have been performance related."
"Mace has assisted in Global Balanced and run International Growth & Income and managed International Value. He may prove to be a little more aggressive than Hickling but I don't see that as being a significant change," Mr. Kobren said.
Mr. Roberts thinks the portfolio manager changes announced last month at Overseas and 25 other Fidelity funds reflect a desire to "keep the star system at bay at Fidelity. They may be very well trying to slide toward a system like the one at the American Funds or Twentieth Century," which use team approaches.
"They want to keep moving people around and get away from a star system or the possibility of a star system," he said.
For instance, one of the domestic managers getting additional fund responsibilities - George Vanderheiden - "probably their premier equity guy" is a not a household name to investors, Mr. Roberts said.
Neither is Rick Mace. Mr. Mace joined Fidelity in 1987 as a research analyst intern covering the appliance industry. In 1988, he became a full-time analyst with Fidelity.
Prior to joining Fidelity, he worked as a securities analyst with Martin Marietta Corp. for two years. Mr. Mace, born in 1961, has a bachelors degree from the University of Virginia and an MBA from the Wharton School, University of Pennsylvania.
William J. Hayes, Fidelity's director of equity investments, said: "Rick Mace is an experienced international equity investor with a successful track record managing International Growth & Income and International Value. He also has been a key contributor to Fidelity's development of an enhanced international equity investment approach."
"These strengths (Rick Mace) has with the other funds and deep knowledge of foreign stock markets will benefit our Overseas fund shareholders. These funds are well suited to Rick's investment style."
He said the move is intended to help "energize" the Overseas fund.
At the same time, he said Mr. Hickling will be returning to International Growth & Income, "the scene of his earlier triumphs." Under his leadership the fund's assets grew to $1 billion from $100 million in 15 months.
Fidelity officials said Mr. Mace and the other portfolio managers were not available for interviews.
Mr. Kelley thinks the changes might reflect Fidelity's "general dissatisfaction with the international arena. They see it as having potentially a lot more growth in assets."
While Fidelity is still known for domestic equity, "they don't want to disappoint with bond and international funds," he said.
