Two Lose Jobs in Putnam Fund Manager Shakeup

March 4, 2005 ( - A day after Putnam Trustees approved a study that would see the company pay over $100 million in damages to shareholders, two money managers have left the firm for performance reasons.

According to Reuters, Brian O’Toole, who was the portfolio leader at the firm’s flagship Voyager fund, as well as the Growth Opportunity fund, will leave the company. His departure will be matched by David Santos, who also worked with the two funds. Last year, Voyager gained only 4.8%, half of the S&P 500, its benchmark. The Growth Opportunity fund had gains of only 1.5% on the year.

“We needed to take a hard look and made tough decisions,” Kevin Cronin, Putnam’s recently named head of investment, told Reuters. “We’re coming to the end of changes in the investment team, but there will always be an element of change.” Voyager has fared poorly, losing 2.23% since the beginning of the year, according to Reuters.

Kelly Morgan, currently team leader and portfolio manager on the Core Growth Equity Team and director of Global Equity Research, will replace O’Toole as chief investment officer of Large-Cap Growth. Robert Ginsberg – a portfolio manager in Core Growth Equity – will join Morgan as a co-leader of the Voyager and Growth Opportunity funds.

Putnam currently managed $205 billion in assets. The company lost nearly $60 billion in assets after regulators came after the company regarding charges that it allowed market timing in some of its funds by preferred investors. This figure constituted part of the projected losses incurred by Putnam fund shareholders calculated in a report byHarvard Business School professor Peter Tufano, which the Putnam Trustees approved Thursday.

The total damages, originally thought to be in the range of $8 million to $10 million, were actually $108.5 million, according to the report (See Putnam Trustees Approve Outside Study Putting Market Timing Damages at $108.5M ).