Putnam and Fidelity may be on the knife's edge with their home state pension fund. While Fidelity is at risk of losing its mandates with the Massachusetts pension fund because of weak investment performance, Putnam Investments is being reviewed because of the Spitzer probe, reports Bloomberg News.

Stanley Mavromates, deputy chief investment officer, told the news service that officials with the fund will meet with both fund firms later this month to discuss the issues.

Putnam Investments invests $750 for the plan in small cap stocks. William Galvin issued a subpoena to Putnam seeking information about trading in its International Capital Opportunities Fund. That subpoena caused Massachusetts State Treasurer Timothy Cahill to put a meeting with Putnam on the agenda. Cahill is also chairman of the Pension Reserves Investment Management board.

"What was brought to light by Secretary Galvin is of concern to the treasurer and is something he's taking a look at," a spokesperson for Cahill told Bloomberg.

Meanwhile, the issues at Fidelity are more run of the mill. Fidelity Investments manages a $450 million domestic equity mandate benchmarked against the S&P 500 for the plan along with a $1 billion international equity mandate.

"We're just triple checking to make sure we understand why they're underperforming, that they understand why they're underperforming and to let them know we are very concerned," Mavromates told Bloomberg. 

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