Putnam Investments is poised to recover after suffering $6.6 billion in outflows in the first quarter, according to Michael Cherkasky, chief executive officer of parent company, Marsh & McLennan Cos.

The outflows aren't over quite yet, said Cherkasky, speaking to analysts during a conference call. The firm expects investors to yank another $5 billion by the middle of the year due, in part, to the end of a partnership with an Australian institutional investor, he said. Much of the outflows have been due to retail investors punishing the firm for its part in the mutual fund scandal. But by the third quarter, Cherkasky contends, the tide will turn, bringing positive inflows to the company.

"First, we expect that institutional flows will turn positive in the third quarter. Our request for proposal activity is up, and we're winning more as the rest of our institutional portfolio becomes more stable," he said.

Cherkasky added that mutual fund sales were "steadily" rising in step with the introduction of new products, such as Putnam's global asset allocation funds.

"Finally we are optimistic about new alliances and opportunities being pursued in Europe, Japan and Australia," Cherkasky said. "We continue to be confident in the future of Putnam."

Cherkasky also dispelled rumors Putnam is for sale, saying, "Running Marsh & McLennan as one company allows us to be more efficient and effective."

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