Putnam Investments has agreed in principle to acquire the 50% stake in PanAgora Asset Management that has been held by Lehman Brothers. Terms of the deal were not disclosed.
The remaining 50% share in PanAgora is held by Japan's Nippon Life Group.
Steven Spiegel, senior managing director at Putnam, said the PanAgora deal ``extends'' Putnam's new liaison with Nippon Life and broadens Putnam's ties with PanAgora. The latter is now subadviser to the S&P 500 Index Fund that Putnam offers its defined contribution clients.
In June, Putnam entered a strategic alliance with Nippon Life jointly to develop investment products and manage assets. It also formed an alliance with Nippon Life's Nissay Asset Management to manage and market international products for Japanese pension funds.
PanAgora will operate as an independent entity. Putnam will have representation on PanAgora's board, but will not participate in PanAgora's day-to-day investing or business operations.
Lakeland (Fla.) Employees' Pension Fund is considering more diversification for its fixed-income portfolio.
The board of the $270 million pension fund is looking at the $108 million core domestic bond account managed by Merrill Lynch Asset Management. Trustees will know if changes will be made in about a month, said Gary Clark, executive director.
U.K. pension funds returned an average 5.6% in the second quarter, their strongest quarterly performance for nearly two years, according to The WM Co.
Overseas equities, worth 23.3% of the average asset mix, provided an 11% return in the quarter. Japanese stocks led all categories, with a 22.5% return, while North American stocks returned 13.9%.
U.K. equities, comprising 52.4% of assets, returned 4.6%, underperforming the Financial Times Stock Exchange All-Share Index return of 5.2%. Underweighting in banking and pharmaceutical sectors, particularly in stocks such as HSBC and SmithKline Beecham, dragged down performance.
