Ronald O'Hanley's pending departure from Fidelity Investments, while seeming to come from nowhere, was inevitable, a number of industry sources said.
The announcement Jan. 22 surprised many in the industry because there had been no indication the Boston-based firm and its president of asset management and corporate services were planning to part ways.
However, with Mr. O'Hanley's contract set to expire — Fidelity would not say when — and with Fidelity Financial Services President Abigail P. Johnson solidifying her leadership role within her family's company, several insiders see this as the ideal time for the former president and CEO of BNY Asset Management to move on and for Fidelity to hand over the reins to someone new.
Mr. O'Hanley plans to leave at the end of this month. In a letter to colleagues obtained by Pensions & Investments, Mr. O'Hanley wrote: “The time is right for me to move on. I will work with (Ms. Johnson) through the end of February to transition asset management to the next generation of leadership.”
In a letter to Fidelity employees, also obtained by P&I, Ms. Johnson wrote: “Over the next month, Ron will help us ensure a smooth handoff to our new leader of asset management.” She added the firm expects to name “an internal successor in the coming weeks.”
Neither Ms. Johnson nor Mr. O'Hanley was available for additional comment.
Mr. O'Hanley's resignation comes at a time when Fidelity's institutional business, Pyramis Global Advisors, has been seeing more outflows than inflows. According to data from eVestment LLC, Marietta, Ga., Pyramis only experienced net inflows during one quarter in 2013. In the second quarter, the firm reported $2.74 billion in net inflows. For the remainder of the year, the institutional arm of Fidelity suffered net outflows — $3.56 billion in the fourth quarter, $1.41 billion in the first and $32 million in the third.
No one interviewed for this story said this is Mr. O'Hanley's fault — or even that Ms. Johnson blamed him. But ultimately, with the stock market doing well, Pyramis seeing outflows and with Mr. O'Hanley's contract up, industry observers agreed the time seems right for Fidelity to move to new leadership.