* Fidelity's head of equities division leaves for Putnam

* Walter Donovan is latest Fidelity exec to join rival

By Jason Szep

BOSTON, April 10 (Reuters) - A top Fidelity Investments executive is leaving to join rival Putnam Investments, Fidelity said on Friday, the latest in a wave of talent to leave the world's biggest mutual fund company for its cross-town rival.

Walter Donovan, president of the equities division in Fidelity's core money-management arm, has left effective immediately, spokeswoman Anne Crowley said. A replacement would be made soon drawn from internal staff, she added.

The recruitment of Donovan is the latest effort designed to reinvigorate Boston-based Putnam, whose assets have shrunk about 60 percent to about $100 billion since 2003 when the firm was caught in an industrywide trading scandal.

Donovan joined Boston-based Fidelity in 1995 in a shake-up to revive its fixed-income division after its bond mutual funds were stung by rising interest rates and risky investments.

He was named director of corporate bond trading that year, transferring from Merrill Lynch Capital Markets, where he was director of corporate bond trading.

Together with Dwight Churchill, who retired in January as senior vice president and leader of Fidelity's New Hampshire-based bond group, Donovan helped to turn around Fidelity's bond group.