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Great-West Lifeco handed the turnaround effort at its troubled Putman Investments unit to a veteran of the most successful mutual fund company on earth, with Fidelity Investment's Bob Reynolds taking the reins.
Mr. Reynolds spent the last seven years as chief operation officer at Fidelity, capping a 23-year-career with the market leader. When he arrives on July 1 as the new president and CEO, current Putnam CEO Ed Haldeman will become chairman of the company.
Great-West, controlled by Power Financial and the Desmarais family, bought Putnam in 2006 for $3.5-billion (U.S.) knowing that it needed to restore the lustre of a company that had seen performance stumble and been humbled by the market timing scandal. At the time, Putnam had $190-billion in assets. It now oversees $175-billion.
The U.S. takeover was close to a bet-the-bank acquisition for the Canadian insurer, which wants to use Putnam as a base for further expansion in the field. Great-West is now signalling where it will focus its rebuilding efforts.
Mr. Haldeman, who was parachuted into the top job in 2003 after a management purge, staunched the worst of the asset bleed, but Putnam and most of its peers have been hit hard by the weakness in U.S. markets this year. There's a sense Putnam doesn't have much traction with clients.
Fidelity, a private, family-controlled company that's often referred to as Fido, has a service and performance culture that seems to attract assets no matter what the weather in markets. Mr. Reynolds helped build that culture as both a top executive and the head of Fidelity's institutional retirement group from 1996 to 2000. Given the new CEO's background, look for Putnam to ramp up its efforts to sell its services to employees in company-sponsored retirement plans, clients who earmark a portion of every paycheque to money managers.
“Bob brings substantial industry experience, energy, and a fresh perspective to Putnam's leadership team,” said Jeffrey Orr, chairman of board at Putnam Investments and CEO of Power Financial.
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