Oregon Ends Putnam Investment Management Relationship

The Oregon Investment Council on Wednesday fired Putnam Investments as manager of $500 million in state pension funds.   The move comes Oregon State Treasurer Randall Edwards recommended the state drop Putnam after fraud and improper trading allegations surfaced against the Boston-based firm (See  Putnam Call-Center Rep Says Market-Timing Warnings Were Ignored ), according to an Associated Press report.

Similar pullouts had previously announced by pension funds in other states, including Massachusetts, Iowa, New York, Pennsylvania, Rhode Island, Texas, Nevada and Vermont (See PA, RI, VT, IA, NY Pensions Fire Putnam ).   Also joining in earlier this week was the nation’s largest public pension fund, the $154.2 billion California Public Employees’ Retirement System (CalPERS), which decided to pull $1.2 billion from Putnam.

Overall,Putnam has lost more than $22 billion in assets since the allegations against it were leveled (See  Texas Joins State Pensions Bailing On Putnam ). Putnam has denied any wrongdoing.

Oregon’s investment council, which oversees investment of $50 billion in assets for several Oregon state funds, hired Putnam in October 2002 to manage investment for the Oregon Public Employees Retirement Fund.   The latest decision comes after a similar move taken by the council last week, when it fired Strong Financial Corp as a manager of the Oregon college savings plan.   The move to oust Strong came after it was alleged that the company founder, Richard Strong, traded his firm’s mutual funds improperly (SeeTrading Probes Muscle Out Strong, Putnam Chiefs).