Putnam Investments on Tuesday said it will cut costs and provide its clients with clearer fee information, as the mutual fund manager fights to win back investors who left in the wake of a trading scandal.
The Boston-based company said it will cut expense ratios on all of its funds, provide more detailed information about how its fund managers are paid and make other changes as it faces charges of securities fraud.
Last fall, state and federal regulators said the company looked the other way when its own managers and clients broke company rules by engaging in quick-paced buying and selling of mutual fund shares. Since then investors, including pension funds and corporations, have quickly pulled money out.
In November alone, Putnam lost some 12 percent of its assets under management and slipped one notch to now rank as the No. 6 fund manager as the scandal mounted and Putnam's corporate parent reshuffled senior management.
Putnam's new president, Charles Haldeman, has mounted a fierce public relations campaign to claw back business, starting with an open letter of apology printed late last year in several newspapers.
"Putnam is determined to earn back the trust and confidence of the marketplace," said Haldeman, said in a statement explaining the new steps on Tuesday. "Our first step was to put in place additional controls to help protect shareholders. The second step was to look at new ways we can better serve the interests of our clients and investors."
Putnam made its announcement on fees one day before its parent, Marsh & McLennan Cos. Inc., was scheduled to announce its earnings and provide new information about Putnam's assets under management.
Shortly after the scandal was revealed, Putnam said its assets under management tumbled $32 billion, or 12 percent, to $245 billion, but analysts have said they expect that number now to be lower.
On Monday, Putnam's former president, Lawrence Lasser, became publicly involved in a fight to get more money from Marsh.
Lasser was removed from his job in November and has since launched an arbitration to determine whether he is owed any more money by Marsh. A spokesman for Lasser said he had no comment on the matter now.
Marsh & McLennan shares were down $1.00 at $47.29 in early Tuesday trading on the New York Stock Exchange.