ATRS Taps Putnam Replacement Managers

Monday, the ATRS board hired Capital Guardian Trust Co. of Los Angeles and Boston-based Wellington Asset Management LLC to run part of the system’s international stock portfolio, which represents about $1 billion of the $7.2-billion fund, according to a report from the Arkansas News Bureau. In early November, the ATRS board fired Putnam, which had more than $524 million in international stocks for the state’s largest pension fund (See  Angelides to CA Funds: Dump Putnam Now ).

The selection of the two investment firms was made on the recommendation of the system’s investment adviser, Chicago-based Ennis, Knupp & Associates, said ATRS Executive Director David Malone. Ennis Knupp advised the board on November 4 to terminate its relationship with Putnam.

In fact, the ATRS board of trustees called a special meeting last month after Putnam’s CEO, Lawrence Lasser, was forced to resign (See  Trading Probes Muscle Out Strong, Putnam Chiefs ), and three New York City pension plans with combined total assets of $725 million pulled their holdings from Putnam.

Putnam is the subject of several investigations of fraud by state and federal regulators on the practice of market timing trading. Since then, a number of pension funds across the nation have withdrawn more than $32 billion from Putnam’s coffers. The withdrawals represent about 12% of the scandal-ridden mutual fund firm’s total assets (See  Putnam Scandal Outflows Continue ).

Currently, Capital Guardian has over $120 billion in assets under management and serves more than 40 of the nation’s 100 largest corporate and public-employee pension plans. Wellington Management has more than 70 years of investment management experience and currently manages $303 billion in assets as of March 31, 2003.