The sale of Putnam Investments has been one of the major recent developments related to asset management and investment companies. Putnam, founded in 1937, has been a staple Boston-based investment firm, managing mutual funds and institutional accounts. This article will summarize the key facts and implications of Putnam’s acquisition by Great-West Lifeco.
Putnam’s Long History and Reputation as a Boston Investment Firm
Putnam Investments has been a prominent Boston-based investment company since its founding in 1937 by George Putnam. Known for its early introduction of the open-end mutual fund, Putnam grew to become one of the largest managers of retail mutual fund assets in the US. Despite some performance challenges in the 1990s and early 2000s, Putnam maintained a reputation as an experienced, fundamental investment manager based in Boston.
Acquisition by Great-West Lifeco in 2008
In 2008, Putnam Investments was acquired by Canadian insurance company Great-West Lifeco for $3.9 billion. Great-West Lifeco, the insurance and investment subsidiary of Power Corporation of Canada, was looking to expand its investment management business in the US. The acquisition allowed Putnam to leverage Great-West Lifeco’s distribution capabilities, though Putnam maintained its Boston headquarters and investment autonomy.
Putnam’s Assets under Management Increased Substantially Post-Acquisition
In the years following the 2008 acquisition, Putnam saw a major increase in its assets under management (AUM), largely driven by growing defined contribution retirement plan assets. Putnam’s AUM nearly doubled from around $120 billion in 2008 to over $200 billion by 2020. The Great-West Lifeco acquisition provided Putnam with enhanced distribution and helped fuel AUM growth.
Putnam Maintained Active Management Focus Even as Industry Shifted to Passive
Unlike some other active managers, Putnam largely retained its active investment approach after the acquisition by Great-West Lifeco. The asset management industry saw accelerating growth in passive investment vehicles like index funds and ETFs. However, Putnam continued emphasizing bottom-up stock selection and other active strategies. While embracing some passive options, Putnam’s leadership indicated continued commitment to active management.
The 2008 acquisition of Putnam Investments by Great-West Lifeco marked a major transition for Putnam. While maintaining its Boston-based identity, Putnam gained enhanced distribution capabilities and saw its AUM expand considerably post-acquisition. Putnam retained its active management focus even as passive strategies gained market share across the industry.