Putnam Back in Business with CalPERS, CalSTRS

September 23, 2004 (PLANSPONSOR.com) - Scandal plagued Putnam Investments - fired in late 2003 by two giant California pension funds - is apparently back in the funds' good graces when it comes to choosing money managers.

California Treasurer Phil Angelides announced Thursday that the Boston-based investment company was once again eligible to bid on business from both the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS). The funds kicked Putnam of their combined $1.5 billion investment mandates because of Putnam’s scandal involvement (See  Angelides to CA Funds: Dump Putnam Now ).

The Angelides announcement during a San Francisco press conference came with the unveiling of new Putnam initiative aimed primarily at retail investors to disclose additional information about its fees and its manager and executive compensation programs.

Under the Putnam initiative, the company will:

  • provide investors with a Web site calculator that will allows them to project fees they will pay on actual and hypothetical investments
  • disclose to investors the aggregate annual compensation paid to each fund’s portfolio management team
  • disclose to investors, within a dollar range, the securities owned by its senior management
  • disclose brokerage commissions paid to top tiers of broker/dealers for equity funds
  • disclose the turnover of any portfolio management team member in the last 12 months and the name and tenure of any lead portfolio manager over the three-year and five-year reporting time frames
  • apply a  12-month mutual fund holding period to senior executives and marketing professionals.

“These principles, coupled with the voluntary incentives that we took earlier this year, demonstrate our determination to better serve the interests of our clients and investors,” said Putnam CEO Charles Haldeman, Jr.

In April, Putnam paid over $100 million in penalties to the SEC for its role in the scandal (See  Details Emerge About Putnam Settlement ).Federal and state regulators have been pursuing a wide-ranging mutual fund investigation focusing primarily on market timing and late trading as well as certain sales practices.