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Reviving a Struggling Fund Firm Is No Easy Task

Encouraging signs are mixed with question marks in the effort to jolt Putnam back to life.

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Since bringing in a new CEO in the summer of 2008, Putnam--once one of the biggest fund firms but more recently one of the least respected--has embarked on a vigorous campaign to restore its image and improve its performance. Many changes have been made and much effort expended to publicize them. So, where does Putnam's corporate culture truly stand right now? That's a complex question without a simple answer. It deserves a detailed look.

A New Leader and More
Putnam has come a long way in the time since Bob Reynolds was appointed CEO in mid-2008, but it faces competitors that have been executing well on strategy and stewardship for decades.

Reynolds, who spent the majority of his career at crosstown rival Fidelity, came to Putnam about a year after the firm was sold to Canada-based Power Financial Company by insurance giant  Marsh & McLennan (MMC). Reynolds came to a firm that was struggling because of excessive management turnover and poor performance across its fund lineup. At the end of 2008, Putnam's five-year fund manager retention rate was the lowest among the United States' largest mutual fund managers, and performance of some of its flagship funds, including  Putnam Fund for Growth & Income (PGRWX) and  Putnam Voyager (PVOYX), had been in the bottom half of its peer group for each of the previous five years.

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Jonathan Rahbar does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.