Clients of Putnam Investments continued to withdraw money from its mutual funds in 2005 in the aftermath of a market-timing scandal, its parent Marsh & McLennan Cos. of New York said in an earnings report today. Assets under management stood at $189 billion at the end of the fourth quarter, compared with $192 billion a year earlier, and revenue also fell.
But at the same time Putnam's operating profit more than doubled to $263 million last year from $98 million in 2004, Marsh reported.
Speaking on a conference call with investors today, Marsh chief executive Michael Cherkasky said the outflows from Putnam's mutual funds last quarter were the lowest in two years and that the trend should turn around by the end of 2006.
"As a brand Putnam has shown enormous resilience over the last five years, weathering the bear market, equity market, performance, and reputational problems,'' he said.
Marsh, the world's largest insurance broker, said that as a whole its fourth-quarter net income was $35 million, compared with a loss of $680 million a year earlier, on revenue of $2.79 billion, down from $2.82 billion for the last quarter of 2004. Shares were down $1.51 to $29.71 in afternoon trading.
(By Ross Kerber, Globe Staff)
