Haldeman retiring as chairman of Putnam
Ex-CEO steered fund firm through rough patch but fell short of performance goals
Charles E. “Ed’’ Haldeman came to Boston seven years ago to rebuild Putnam Investments’ reputation as a venerable money manager after its mutual funds plummeted when the tech bubble burst.
He will now be leaving Putnam without fulfilling that goal, as the Boston firm said yesterday Haldeman is retiring as chairman of its investment arm, while his successor, chief executive Robert Reynolds, solidifies his control over the direction of Putnam.
“Bob Reynolds is doing a great job as CEO,’’ Haldeman said in a statement. “This is a good time for me to advance to the next stage of my career.’’ Putnam said he was traveling yesterday and unavailable for additional comment.
But Haldeman did have a signature accomplishment in the five years he served as Putnam chief executive before moving up to his most recent supportive, behind the scenes role. He steered the investment company through the most tumultuous period in its history, when investors withdrew billions of dollars and regulators hit the firm with hefty penalties for the scandal involving Putnam managers who were improperly trading in their own funds.
Haldeman guided Putnam through what was effectively a run on the bank, conducting round the clock, cross-country trips to clients, to convince them to stand pat while he imposed a new culture and series of reforms to restore integrity to a once-respected old-line company.
“He was an important element in a time when Putnam was under siege for poor performance and poor practices,’’ said mutual fund consultant Geoff Bobroff, the president of Bobroff Consulting in East Greenwich, R.I. “He started the reorganization of Putnam.’’
Longtime industry veteran T. Neil Bathon, managing director of Wellesley’s PMR Associates LLC, which advises asset managers, also said Haldeman helped stabilize the firm at a challenging time. But Bathon also said he didn’t think Haldeman’s role over the past year was “all that impactful in terms of influencing the future prospects of Putnam.’’
On the investment front, Haldeman replaced the go-go investment strategy of the 1990s that produced eye-popping returns at some of Putnam’s mutual funds. Awash with cash, the firm fell hard when the investment bubble burst.
Haldeman cut back on risk-taking by managers, increased Putnam’s analytical abilities, and set as a goal steady but unspectacular returns that over time would outperform other investment firms.
It hasn’t happened yet. Some mutual funds continued to perform badly throughout much of the decade, others had brief bright spots, and only now are a few of the company’s flagships funds posting good results - under Reynolds.
Meanwhile, in another echo from the era of scandal that Haldeman confronted, the Securities and Exchange Commission late Monday said it had settled with the last former Putnam executive who was involved in mishandling $4 million of one client’s funds in a case dating back to 2001. Donald F. McCracken agreed to pay a $35,000 fine, the SEC said.
Putnam has a little more than $102 billion in assets under management.
With Haldeman’s departure, Putnam said it will eliminate the chairman position he held at Putnam Investment Management LLC. Reynolds will take his position as president of the Putnam family of mutual funds.
A Dartmouth College alumni, Haldeman is a trustee of the New Hampshire school and a member of Harvard Business School’s Board of Dean’s Advisors, the Partners HealthCare investment committee, and the executive committee of the Boston Chamber of Commerce.
Separately yesterday, Putnam Investments said it plans to shut down its Franklin office by year end. The company, which handles some administrative chores at 100 Franklin Park, said it plans to move the more than 500 employees who work in Franklin to offices in Andover, and Boston; some employees will be allowed to telecommute.
Company spokesman Jon Goldstein said the company expects to save money by consolidating its offices, and make it easier for different departments to collaborate by being in the same location.
Putnam has 2,200 employees worldwide, including more than 2,000 in Massachusetts. In February, the company cut 10 percent of its staff, about 260 employees.
Todd Wallack can be reached at twallack@globe.com. 