The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Marsh CEO Scotches Talk of Putnam Sale Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, March 02, 2005

Marsh CEO Scotches Talk of Putnam Sale

by: Sean Hanna, Editor in Chief

Putnam is not for sale. That message was delivered loud and clear by Marsh & McLennan Cos. CEO Michael G. Cherkasky in the company's regular quarterly conference call with Wall Street analysts. What is not certain is whether his comments will stop the speculation.

Rumors that Marsh would look to sell Putnam are nothing new. During the good times before 2000, the speculation was that then Putnam CEO Larry Lasser was pushing to free the firm from Marsh. At that time, many senior executives at Putnam, including Lasser, outearned the top executives at Marsh.

Since the collapse of the market for growth stocks (the style Putnam fund pros rode hard during the bull run) and the investigations into improper trading by portfolio managers and others in Putnam funds, the shoe is on the other foot. The poor performance combined with the fund scandals put nearly all of Putnam's institutional business in play during 2004. In most cases, those searches are through and the situation appears to have stabilized. Clients pulled a net $105 billion from Putnam in the 15 months since the first report of the allegations, but only $11 billion was pulled in 2004's fourth quarter.

Sandra S. Wijnberg, Marsh's chief financial officer, tried to put a positive spin on those numbers, although she admitted that fourth-quarter outflows were "disappointing." She said that she expects fund sales to pick up in 2005 as the firm increases its institutional and retail marketing and predicted that Putnamís asset base again grow in 2006.

Yet, there are many observers who wonder how long Marsh will want to hold onto Putnam and whether the brand is too tarnished to quickly rebound. During it struggles, for example, it lost many of its key sales and operational staff.

Still, the skeptics were wrong pre-2000 and they may be wrong again. Cherkasksy used yesterday's call to put any doubts about Marsh's intent to keep Putnam to rest.

"It's not going to happen," he said when asked about a sale or spinoff of Putnam. "This is a business that from both a management and industry position and perspective is set to rebound. It will remain in, and be an important part of, Marsh & McLennan's future," he added.

Despite Cherkasksy's comments, the Boston Globe reported Wednesday that Putnam officials have considered a spinoff. They found that road to independance filled with potentially tough-to-climb hills, the paper added.

A spinoff would create an "enormous" tax liability for Marsh, it reported. Alternatively, if the Putnam senior managers lead a buyout they would have to raise several billion in financing. They would effectively be trading one master for another.  

Stay ahead of the news ... Sign up for our email alerts now

 Do You Recommend This Story?

Return to Top
 News Archives
2023: Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Add to My Yahoo!
follow us in feedly

©All rights reserved to InvestmentWires, Inc. 1997-2023
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use