The departures of Thomas Hoey , who led the company’s $743 million Mid-Cap Value Fund since 1999, and Graham Spiers , a member of Putnam’s global asset allocation team, come as a new chief executive tries to rebuild the sixth-largest U.S. mutual fund firm after a devastating scandal, Reuters reported.
“These were personal decisions that were not related to market timing,” Putnam spokeswoman Laura McNamara told Reuters about the departures.
Putnam has been embroiled in a debilitating trading scandal where investors pulled out $54 billion in assets in the 2003 fourth quarter alone after regulators charged the company with securities fraud.
To replace Hoey , Putnam promoted Edward Shadek , who already helped manage the fund and is chief investment officer for Putnam’s small- and mid-cap value funds. Putnam also added James Polk as a manager to the team, McNamara said. Putnam, unlike other fund firms, relies on teams rather than individuals to manage its funds. Spiers was a member of a team that manages roughly $4.5 billion in assets. Bruce McDonald was added to the team.
The resignations come shortly after Charles Haldeman , Putnam’s new chief executive, overhauled the bonus system, a move some analysts said might prompt managers to leave. H aldeman took the top job in November when Putnam’s corporate parent, Marsh & McLennan Cos. ousted Lawrence Lasser soon after regulators charged Putnam with securities fraud.
To move past the scandal, Haldeman has promised investors more insight into how Putnam operates and is said to be pushing managers to pick better stocks and boost performance.