Prominent Putnam Manager Resigns

Putnam has announced the resignation of Jeff Knight, the head of the firm's global asset-allocation team. Knight's departure is a big loss for the firm. His team, which manages approximately $10 billion, had remained intact in the 2000s as Putnam endured regulatory problems, asset outflows and manager and CEO exits and even after its sale to Canada-based Great-West Lifeco. More important, Knight was also the driving force behind Putnam's absolute return funds, which were some of the firm's best-selling funds the past several years. His team also oversaw Putnam's Dynamic Asset Allocation funds and its target-date and 529 plan offerings. Putnam says Knight is leaving to pursue other opportunities.

Putnam is filling Knight's role in much the same way it did when Rob Bloemker, its head of fixed income, departed in 2011. It is dividing Knight's management responsibilities among four of his lieutenants: James Fetch, Robert Kea, Robert Schoen, and Jason Vaillancourt. Each will be named a co-head of the team. They are all long-standing members of the GAA group and each of them worked on the absolute return and asset-allocation funds. Fetch will focus on portfolio construction, while Schoen will concentrate on equity process and Kea and Vaillancourt will work on top-down issues affecting the portfolios. Those duties are similar to what each of them was doing prior to Knight's resignation, which should smooth the transition.

Putnam has been successful at attracting and retaining talent since new CEO Bob Reynolds came onboard in mid-2008. But Knight's exit adds to a growing list of recent departures at the firm, mostly on the fixed-income side. Bloemker is now principal of Five Ten Capital, where he works with two Putnam alum, Kevin Cronin and Carl Bell. Cronin left the firm in 2008 for OceanGate Capital; Bell, a mortgage-backed security expert, left in the summer of 2011. Last fall Raman Srivastava, a prominent bond portfolio manager, jumped ship to Standish Mellon, where he is the co-deputy chief investment officer and head of fixed income. While Putnam's team-based approach to fixed income and asset allocation has been able to absorb these vacancies, the trend bears watching if the departures accelerate.