Marsh & McLennan Cos., the world’s biggest insurance brokerage, says it is checking the market for a possible sale of its Boston-based mutual funds division, Putnam Investments.
Michael G. Cherkasky, New York-based Marsh & McLennan’s president and chief executive, said the company has had “repeated inquiries” in recent months from parties interested in either buying or forming a partnership with Putnam. Marsh & McLennan had said earlier it was not interested in selling Putnam.
“I decided it was in the interest of our shareholders to do a market check to determine the value others would put on Putnam,” Cherkasky said in a statement Tuesday.
“We have just commenced this process and have not decided to take any specific action in regard to Putnam at this time,” he said.
The statement did not say if Marsh & McLennan had hired an investment bank to solicit offers for Putnam.
The company had said in June 2005 it conducted a “strategic review” of its operations and would not sell or spin off any of them, including Putnam.
Putnam, which was the first company accused of wrongdoing in a 2003 scandal over mutual fund market-timing practices that eventually enveloped much of the industry, has suffered a steady loss of funds since.
In April 2004, Putnam agreed to a fine of $110 million to settle allegations by federal and Massachusetts regulators of allowing improper market timing, or rapid in-and-out trades by favored clients, hurting long-term shareholders. The following March, the company agreed to pay $83.5 million more to current and former fund shareholders to resolve the allegations.
Putnam’s assets under management reached as high as $277 billion before the scandal. In its second-quarter earnings report last month, Marsh & McLennan said revenues at Putnam declined 10 percent to $339 million; average assets under management were $185 billion, down from $196 billion in the second quarter of 2005.
On Tuesday, Marsh & McLennan shares rose 19 cents to $29.19 in aftermarket trading on the INET electronic exchange, after closing up $1.19, or 4.3 percent, at $29 on the New York Stock Exchange.
Marsh & McLennan had announced on Friday it will cut 750 jobs, consolidate some locations and revamp its information technology structure to cut costs. None of the cuts would affect Putnam, which employs more than 3,000, the parent company said. In addition to its Boston headquarters, Putnam has offices in London and Tokyo, and Massachusetts offices in Andover, Franklin and Norwood.
Topics Marsh McLennan
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