Washington State Investment Board, Olympia, terminated Putnam Investments as a manager of $585 million in international equities. The action "sends a clear message that the board has lost confidence in Putnam and establishes WSIB's expectation about what is unacceptable conduct, but not in a haphazard fashion," said Joe Dear, executive director, in a press release. "We're disappointed about the decision of the Washington State Investment Board but we hope we will have the opportunity to manage investments again for them in the future," said Laura McNamara, Putnam spokeswoman.
The board, which oversees $40 billion in retirement plan assets, will conduct an expedited search for a replacement, which could be picked as early as January. Putnam will continue to manage the portfolio until a replacement is found. Callan is the consultant.
Separately, Kimberly-Clark Corp., Dallas, terminated Putnam, which ran $246 million in active international equities for the $2.8 billion pension plan, said a company official. He would not provide further information. Stephen J. Wagenbach, managing director at CRA RogersCasey, the plan's consultant, would not comment on the termination.
Also, Lansing (Mich.) Employees Retirement System terminated Putnam, which ran $9 million in active international equities, said Jill Rhode, deputy finance director. The $166 million pension plan made the move in response to trading abuse allegations as well as other recent terminations by many Putnam clients, Ms. Rhode said. The money was parked in a portfolio managed by INVESCO, its other international equity manager, raising it to $18 million, she said. The system plans to search for a second international manager within six months, she said, but details have not been finalized. Asset Consulting Group assisted. Ms. McNamara at Putnam did not return a call for comment by press time.