Putnam Investments has been losing mutual fund assets for five years running now, Bloomberg reports. The company suffered another $2.3 billion in net withdrawals in May, bringing its total assets down to $94.5 billion, less than half of the $19.7 billion
Putnam managed in 2000. Today, the company ranks as the 11th largest mutual fund company in the nation, down from No. 4 in 2001.
The company's total assets, including pension funds, are now $182 billion, down from $422 billion in June 2000.
Putnam began losing assets due to poor returns, but the problem only became exacerbated when the fund scandal broke and Putnam was one of the original companies named in New York Attorney General Eliot Spitzer's lawsuit and the first one to face civil fraud charges. The funds have continued on a lackluster performance path, with only 45% of the company's funds outperforming their peers in the three years ended May 31.
Laura Lutton, an industry analyst at Morningstar, implied the end of Putnam's troubles may be nowhere in sight, saying, "Advisers are just tired of making excuses on Putnam's behalf to their clients."
Nonetheless, Michael Cherkasky, chief executive officer of Putnam's parent company, Marsh & McLennan, recently told analysts he expects withdrawals to cease by the fourth quarter, a sentiment Putnam spokeswoman Laura McNamara echoed in an e-mail statement to Bloomberg.
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