With the empire he created at a crossroads, famously tightlipped Fidelity chairman Ned Johnson is as enigmatic as ever. But though the man himself isn't talking, what he has been spending his billions on speaks volumes — and might just reveal his plans for Boston's last business dynasty.


Photograph by lisa richov

2. Beacon Hill Townhouse, $117,500

For nearly four decades now, Johnson, by far the richest man in Boston, has lived in the same spot on the flat of Beacon Hill. His three-story brick townhouse, one in a row of nearly identical residences, is set close to the traffic on Storrow Drive and not far from the antiques shops of Charles Street. (Johnson’s passion for collecting notwithstanding, he has stopped at a nearby Asian art dealer on only a couple of occasions. “He’s not a tire kicker,” says a clerk there.) When Johnson was younger, it was not uncommon for him to walk to his office on Devonshire Street in the Financial District. These days, he is more likely to get there by car. A silver Mercedes can often be found parked directly in front of his green door, bearing one of those three-digit license plates that some Massachusetts families pass down for generations as a subtle marker of status. The car itself is a model that would have cost Johnson about $50,000—at least, that was its sticker price three years ago, back when Mercedes stopped making it.

According to city records, there are four fireplaces and seven bedrooms in Johnson’s house, which he bought for $117,500 in 1970. Though it’s now worth $3.4 million, by the standards of his tax bracket it is as intensely modest as the Mercedes. Proud and stately, the house nonetheless stops short of calling attention to itself—a lot like its owner. When the place next to his was put up for sale in 2002, it was a trust controlled by Fidelity executives—and not Johnson himself—that bought it for $3.2 million, a tactic often employed by the wealthy in order to keep their names from turning up in public records, or to keep sellers from boosting their prices when they learn a billionaire is involved.

Johnson has seen his fortune skyrocket in the time he’s called this corner of Beacon Hill home, to the point where he could afford to live literally anywhere.

That he’s opted against trading up to a lavish compound in the suburbs makes sense to those who know him. “Ned’s the kind of guy who walks the walk,” a friend of his explained to me. “He’s all about investing and saving for retirement. The old story is he’d pay for a parking meter and walk 10 blocks to his meeting rather than park in a garage.” Still, there’s more to where and how Johnson chooses to live than mere frugality. He has the respect for history of a man whose family has been in the Boston area since 1635, and who—through his longtime support of the Society for the Preservation of New England Antiquities, for example—remains active in causes dedicated to honoring a bygone era. He seems to have instilled a similar sensibility in daughter Abigail, who is raising her children in the same Milton house where her father grew up, and where Johnson’s mother was raised.

Though Johnson’s Beacon Hill townhouse is no ancestral heirloom, it is still linked to a patrician spirit that he and his family have treasured for generations. Behind the high brick walls that enclose his backyard is a garden plot, part of a block-wide green space that he shares with his neighbors. It’s a verdant oasis, but to those with the sense to appreciate it, the place is something more, too. The garden was once the site of the grandest literary salons of the day, playing host to the likes of Ralph Waldo Emerson and Charles Dickens. Henry Wadsworth Longfellow, another guest, planted some of the garden’s shrubs himself.

As aware as Johnson must be of the luminaries who frequented this spot, he is equally inspired by the cautionary tales that played out on his property. There’s an old story he enjoys sharing about the land on which his home is built, and the memory of Sterling Elliott, who once owned it. At the turn of the 20th century, Elliott had more than 100 patents to his name, but the invention that seemed as though it would secure him lasting renown was his Addressograph, which stamped addresses on catalogs for mail-order companies like Sears. On the back of this machine, Elliott built a company bigger and more advanced than any other of its kind. Yet as Johnson noted in a 1996 essay he wrote for the American Academy of Arts & Sciences, the lesson Elliott provides is not in his rise, but in his lost legacy: For as powerful as Elliott was, his company was ultimately overtaken by its competitors. “Who today has ever heard of him or his Elliott Addressograph?” Johnson wrote. “Both are totally forgotten.”



3. There Will Be Dancing: The History of a Johnson Family, $22,000

In the early 1990s Johnson tasked Fidelity staffers with producing a book that would commemorate the company’s 50th anniversary in 1996. Upon starting the project, they quickly discovered that Fidelity’s story proved inextricable from that of the family. And so Susan Keats, the Fidelity vice president who spearheaded the book, wound up writing about the Johnsons instead. “It became evident that a history of the family was necessary to understanding the history of the corporation,” she explained in the preface to the first of what became a two-volume set. Its title, There Will Be Dancing, was itself borrowed from Johnson lore: It’s an allusion to Ned Johnson’s father’s instructions for the planning of his retirement party.

In 2000, Fidelity published 1,000 hardbound copies of the book’s first volume, followed the next year by an equal number of the second (a project that one printer estimates would cost around $22,000). Johnson had an additional 20 editions bound by hand in red leather. Across 800-plus pages filled with personal photos and biographical sketches of relatives, the book conveys just how tightly the family identity is wrapped up in their businesses. For generations, the Johnsons owned a downtown department store named C. F. Hovey (which was later sold to Jordan Marsh). Johnson’s father, Edward Johnson 2nd, broke with tradition when he decided not to join the family business, only to eventually start his own in Fidelity. Keats was impressed by the strain of entrepreneurial sense that runs through the clan—a sort of “unmapped gene,” she called it.

Less hereditary were the scholarly ways of Johnson’s father, who attended Milton Academy, Harvard, and Harvard Law. Never much of a student, Ned Johnson began his studies at Milton—where he once blithely pointed out to a teacher who had corrected his spelling that he’d always have a secretary to do his proofreading—before transferring to Tabor Academy in Marion. The Johnson-funded book mentions the switch, but not the reason for it, nor that he attended a third high school, the New Preparatory School in Cambridge. “It was sort of a cram school for Harvard,” says one of his classmates. “If you failed to get in on the first crack, this was the way to take a second shot at it.” While there, Johnson seems to have made little impression on his schoolmates. In the yearbook for the Class of 1950, a student named John Bilafer predicted where they all might end up. Some would be engineers; others would lead companies. Johnson, he ventured, would invent a new kind of tennis racket. (“He seems to have gone in a different direction,” Bilafer told me, laughing.)

At 20, Johnson finally headed off to Harvard, where he was known more for his new Oldsmobile than his intellectual prowess. After graduation, he served two years in the Army, developing a taste for riesling during his time in Germany. Once back in Boston, Johnson took a job working at State Street Bank, where he spent a short and unsatisfying stint filling out stock certificates before joining his father’s company.

Originally trained as a lawyer, the elder Johnson was so fascinated by investing that he used to paper the walls of his Ropes & Gray office with stock charts. This sideline as an investor made him the perfect choice to manage his family’s department store fortune. He began sinking much of it into a small mutual fund called Fidelity, and by the end of 1946 had taken full control of the investment vehicle. His ambitions were modest; he fondly referred to the young company as “my darling little trust fund.”

By the time Ned came aboard as a junior stock analyst in 1957, Fidelity had matured and was accepting money from non–family members. Any doubts about the younger Johnson’s proficiency were quickly erased, as he proved a natural stock picker. His father took notice. One Saturday in June 1964, Edward Johnson reportedly told Gerald Tsai, a sublimely talented investor who had mentored the younger Johnson in his early days, that Tsai would take over the company. By Monday, though, Edward made it known that he’d had a change of heart, “because of family,” he explained. The next year, Tsai sold back his $3 million stake in Fidelity and left for New York, where he became a billionaire investment wizard on his own terms.

One year around this time, Fidelity raked in a $5.5 million profit. The stunning gains actually embarrassed Johnson senior: Even though he’d opened the company to outside investors, he still saw it primarily as a kind of public trust meant to safeguard money, more akin to a nonprofit charity than a capitalist enterprise, and he didn’t think trustees should get rich off the fortunes they protected. “A company like ours should never make this much money,” he told his son.

Ned Johnson, though, understood Fidelity differently. He felt the firm was providing valuable investment advice to its customers, and that know-how was worth being paid for. When Johnson’s father turned over day-to-day management of Fidelity in 1972, he wanted to know that his son shared his sense of responsibility to the investors. He did, but he’d also inherited the capitalist streak that had made the family’s department store so profitable. “I don’t think Mr. Johnson would have built Fidelity, like Ned did, into what it is today,” Tsai, now 78, told me. “I don’t think he was interested in building a huge organization. Ned has that talent.”

As Fidelity has grown, one of Johnson’s chief challenges has been keeping the company operating according to the principles set out by his father. This is a duty he will pass on to Abigail, whom Johnson has groomed in much the same way he was. Johnson still retains both the CEO and chairman titles, and whispers within the company suggest he may be inclined to divide those posts between two successors. In this scenario, Abigail will become chair—a concession perhaps to those who question whether she has what it takes to steer the company alone—while the CEO post goes to someone else.

Last spring, in a rare moment of candor, Johnson talked in general terms about family businesses in an interview with the magazine Institutional Investor, saying that even when such companies rely on an outsider for day-to-day management, they still need family members in positions of prominence. They provide stability, he said, “and an ongoing philosophy or culture of doing things a certain way.” In Fidelity’s case, that’s the Johnson way. And Abigail’s unremarkable record as a stock picker aside, no other prospective chairman could understand the ins and outs of the Johnson way better than she.