Institutional investors are hinting at forgiving Putnam Investments for allowing itself to become a key player in the far-reaching mutual fund scandals that, according to regulators, siphoned off profits from long-term investors, Reuters reports.

The Massachusetts state pension fund voted Tuesday on a proposal rehire Putnam as a small-cap investment manager for its $32 billion portfolio. The fund, which boasts one of the best track records among its U.S. pension fund peers, is conducting separate searches for a small-cap investment specialist and financial services provider to invest in hedge funds. The group is also looking to fire an investment manager, according to Reuters.

The outcome of the vote could reduce the negative publicity surrounding Putnam and sway other institutional investors to give the mutual fund provider a second chance. Negative repercussions stemming from Putnam’s trouble with securities regulators prompted institutional investors like the Massachusetts pension fund to withdraw billions. Putnam’s assets under management have shrunk from $272 billion to $209 billion during the past year. The firm’s standing among the largest mutual fund providers slipped to seventh place from fifth place during that period.

As a means of buttressing its reputation, Putnam forged an ad hoc contract with investors by promising to disclose fund managers’ compensation packages and reveal its largest blocks of broker/dealer commissions.

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