Odd Lots, July 8, 1999
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Thursday, July 08, 1999

Odd Lots, July 8, 1999

Putnam uses Lee to lure wealthy clients
From Boston Globe
In a step to distinguish itself from competing mutual fund companies Putnam Investments has teamed up with Boston financier Thomas H. Lee to offer alternative investments to institutional investors and wealthy individuals. Putnam is hoping to retain its most affluent clients and attract money from new investors after sharp drop in 1998 sales. The Putnam-Lee agreement is believed to be among the first of its kind in the mutual fund industry. Investment offerings under the agreement would be rolled out by year's end through a newly formed investment partnership, TH Lee, Putnam Capital.

EAFE trounced by active managers
International indexing should logically beat active international funds more than domestic indices beat active domestic funds because of international expense ratios and high transaction costs. However, Morgan Stanley's Europe, Australasia and Far East (EAFE) Index, has been beaten by as many as 90% of active managers in the last decade. As a result, investors have been slow to embrace international indexing.

More on Pimco's merger talks
From Los Angeles Times
Pimco Advisors Holdings, the nation's largest bond-fund manager, is in talks with Allianz, one of Europe's largest insurers, about selling all or part of the Newport Beach company to expand its presence overseas, sources say. A sale of Pimco could bring as much as $5 billion, which is almost five times the company's book value. A merger with the German giant would signal a trend in the belief that bigger is better and the eagerness of U.S. money managers to take their financial products into largely untapped foreign markets. These markets have been viewed as major growth opportunities.

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