Fixer takes Putnam helm

Charles "Ed" Haldeman Jr. is getting to be an old hand at fixing broken investment firms.

Yesterday, Haldeman was named chief executive of Putnam Investments, replacing Lawrence J. Lasser, who resigned in the face of fraud charges and fund withdrawals that have engulfed the venerable Boston firm. Haldeman's promotion from Putnam's cochief investment officer is part of a housecleaning by its parent, Marsh & McLennan Cos., which also installed its former chief executive and current board member, A.J.C. "Ian" Smith, to a new post of Putnam chairman, indicating that Marsh & McLennan will keep its Boston subsidiary on a short leash.

In an interview yesterday, Haldeman said his first order of business is to keep Putnam's investment team, wracked by a trading scandal involving several of its most prominent international money managers, focused on making money for the firm's 2,200 institutional clients and millions of individual investors without being distracted by the charges filed against the company by state and federal regulators.

"Our number one priority is to manage that money effectively," Haldeman said. "People have entrusted it to us. And it isn't like they said, `Take a few days off and regroup.' "

Haldeman's promotion marks the third time in the past five years he has been tapped to help rebuild an investment firm struggling to right itself.

Indeed, yesterday was a whirlwind inside Putnam, beginning with Marsh & McLennan chief executive Jeffrey W. Greenberg's announcement that Lasser was out after 17 years at the helm. Joining Haldeman and Smith in the leadership change is Steven Spiegel, chief of Putnam's global distribution side, who will become Putnam's vice chairman, a new post.

"We are taking actions today to address the issues that are confronting Putnam," Greenberg said in a statement. "The kind of conduct that occurred has no place at Putnam. We are taking measures to see that this does not happen again."

As for Lasser, Greenberg curtly acknowledged the work of a man who spent 33 years at Putnam and built it into a giant of the mutual fund industry: "We thank Larry for his contributions to Putnam's growth," Greenberg said in his statement. "During his tenure, Putnam has grown to become one of the nation's leading investment management companies."

Later, at an appearance with Massachusetts Treasurer Timothy P. Cahill, Greenberg repeatedly declined to discuss the reasons behind and the terms of Lasser's departure, and then bolted from a gaggle of reporters chasing him through the State House corridors.

Lasser remained unavailable to comment. Reached at their home yesterday, his wife, Michelle Lasser, said, "I only wish the press would try to be fair, because it's been very harmful."

Marsh & McLennan also said it has retained Framingham native Barry P. Barbash, a former head of the Securities and Exchange Commission's investment management division, and now a lawyer in Washington D.C., to conduct an independent review of Putnam's procedures and controls to see what went wrong, and what needs fixing.

"There have been assurances from the highest level that we can go forward with a no-holds-barred review," Barbash said in an interview, and that "our recommendations will be viewed seriously."

Haldeman said another of his near-term goals is to work with Barbash and the new members of Putnam's leadership team to devise controls to ensure "we become the absolute model for fiduciary and ethical behavior in the investment management industry."

Friends, colleagues, and industry analysts describe Haldeman as a smart, decisive, and experienced business and investment professional with a pronounced reputation for honesty and ethical behavior -- qualities many said are what Putnam needs now to repair a reputation tarnished by federal and state fraud charges for allowing money managers to market time the company's mutual funds.

"If there's anyone who can bring order back to the investment process at Putnam, and the respect of the investment community at Putnam itself, it's Ed," said Richard Charlton, the president of New England Pension Consultants, a Cambridge investment consultant that recently advised its clients to fire Putnam as manager of international investments because of the turmoil there.

Jon Boscia, chief executive of Lincoln Financial Group in Philadelphia, hired Haldeman in late 1999 to turn around lagging performance at the company's Delaware Investments unit, which at the time was considered one of the most "dysfunctional" money management firms in the country.

Haldeman cleaned house, replacing nearly two-thirds of the firm's 200 investment professionals, and imposed a more disciplined investment process across the company. By the time Haldeman left for Putnam in October 2002, Delaware's mutual funds had improved considerably.

"Ed is a very demanding executive in making sure that only the best occurs inside the company," Boscia said. "He's not a softie at all. What he is, is fair, morally grounded, and concerned about people."

Haldeman has strong Boston and New England connections as a graduate of Dartmouth College and Harvard's business and law schools. Before joining Delaware Investments, Haldeman was president of United Asset Management, a Boston company that owned a string of money management firms. The UAM job, colleagues and industry consultants said, required a high degree of administrative skills and finesse at corporate politicking, which will be in demand at the much larger Putnam, with nearly 6,000 employees.

Haldeman also spent 25 years managing money at Cooke & Bieler Inc., an investment boutique in Philadephia.

"Ed is very driven person, which is very good. He is very focused on what he wants to accomplish," said Sam Ballam, a Cooke & Bieler partner who previously was a client of Haldeman's when he served as a financial official at local hospital system that invested with the firm. "But he will accomplish it through a team approach. He's a team builder, a team leader, a `let's pull together and get the job done guy.' "

Such qualities are needed at Putnam right now too, where employee morale is suffering under the weight of the market-timing trading scandal. Yesterday, Haldeman spent his first hours at the helm reassuring employees and the firm's large investors that he would fix the problems that brought down two government complaints and a possible criminal probe on the firm.

One part of that job was to accompany Greenberg on the visit with Cahill, who last week led the Massachusetts employee pension board to fire Putnam from managing $1.8 billion.

"They made a very compelling case why we should reconsider," Cahill said after meeting with the pair for about 30 minutes, and offered them hope that the pension fund would "take a fresh look" at Putnam next year. Public pension funds pulled a total of $4 billion from Putnam last week, and many other large funds, such as California's, have been considering whether to dump Putnam.

Andrew Caffrey can be reached at caffrey@globe.com.

(Kimberly Blanton of the Globe staff contributed to this report.)