Putnam Investments
| File:Putnam Investments.svg | |
| Company type | Subsidiary |
|---|---|
| Industry | Financial services |
| Founded | 1937 |
| Headquarters | 100 Federal Street Boston, Massachusetts |
| Products | 401(k)s, mutual funds, retirement plans |
| AUM | US$142 billion (November 2023) |
Number of employees | 1,200 (May 2023) |
| Parent | Franklin Templeton Investments |
| Website | www |
Putnam Investments is a firm specializing in investment management, established in 1937 by George Putnam, who introduced one of the earliest balanced mutual funds known as The George Putnam Fund of Boston.
Based in Boston, Massachusetts, Putnam maintains a global presence with offices located in London, Tokyo, Frankfurt, Sydney, and Singapore. The company operates as a subsidiary under the ownership of Franklin Templeton Investments.[1]
History
The firm was founded by George Putnam in 1937 and was among the first to develop balanced mutual funds. In 1969, Lawrence Lasser joined the company and played a significant role in expanding Putnam into one of the leading mutual fund managers.[2]
Putnam broadened its international reach in 1997 by forming a partnership with Nippon Life Insurance and its affiliate Nissay Asset Management based in Japan.[3]
2000 to 2006
Starting in 2000, the firm's assets under management experienced a steep decline from $400 billion down to $192 billion.[4]
In 2003, regulatory authorities including the SEC and Massachusetts officials charged Putnam with permitting certain portfolio managers and select clients to engage in rapid mutual fund trading. This led to the resignation of CEO Lawrence Lasser, with Charles "Ed" Haldeman stepping in as his successor.[5]
Between 2003 and 2007, Haldeman spearheaded significant organizational changes: establishing new corporate values, cutting staff numbers by approximately 11%, reducing senior executives’ pay by half relative to 2000 figures, and revising portfolio manager incentives to prioritize long-term results.[5]
In early 2004, Putnam acknowledged allowing market timing activities. The company agreed to pay $110 million in fines and restitution as part of settlements with federal and state regulators.[6] During this period, investors withdrew at least $28 billion within six months following the controversy.[2] By May of that year, more than seventy civil lawsuits were initiated alleging improper trading practices.[2]
In 2005, Putnam resolved claims with a $40 million settlement concerning undisclosed payments made to brokerage firms that recommended its funds. This inquiry lasted three years and involved payments to roughly eighty brokers.[7] These settlements further accelerated investor redemptions.[4]
By 2006, nearly fifty percent of Putnam’s mutual funds achieved performance rankings above the median among their peers—marking progress compared to earlier years.[5] Nonetheless, an SEC lawsuit accused former employees of defrauding mutual funds and a corporate retirement plan by concealing a $4 million error related to investment processing for Cardinal Health’s plan dating back to 2001.[8]
2007 to Present
In February 2007, Great-West Lifeco, a subsidiary of Power Corporation of Canada, completed the acquisition of Putnam Investments, a mutual fund firm facing challenges, from Marsh & McLennan Companies for roughly $3.9 billion. This move was consistent with Great-West Lifeco's 2005 plan to broaden its presence in the U.S. market. The following month, Putnam received the 2007 Optimas Award for Ethical Practice, honoring its initiatives to enhance corporate culture.
In June 2007, two former managing directors at Putnam resolved SEC allegations concerning improper mutual fund trading by each paying $400,000 and accepting one-year suspensions as investment advisors. Additionally, that month, former CEO Lasser settled SEC claims by paying $75,000 over nondisclosure of preferred marketing agreements financed by the company.
Robert L. Reynolds replaced Haldeman as Putnam’s president and CEO in 2008. He unveiled restructuring measures including consolidating equity funds, implementing performance-related pay, and reducing staff by 47 positions. During September 2008, amid intense redemption demands triggered by the financial crisis, Putnam’s board decided to liquidate its $12.3 billion Prime Money Market Fund to safeguard remaining investors.
By 2009, Reynolds had introduced a comprehensive 10-point initiative promoting collaboration between public and private sectors to reinforce retirement systems. That same year, Putnam launched the industry's inaugural absolute return funds tailored for U.S. retail clients and reentered the institutional defined contribution arena with a new 401(k) offering.
Putnam’s dedication to client service was acknowledged in 2011 when it earned the DALBAR Service Award for the 21st consecutive year, highlighting its leadership in supporting both clients and financial professionals.
On May 31, 2023, Great-West Lifeco declared it would sell Putnam Investments to Franklin Templeton Investments for $925 million; notably, PanAgora Asset Management, then operating as a Putnam subsidiary, was not included in this transaction. The deal was completed in January 2024, representing a major transformation in Putnam’s corporate ownership and global operations.
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