Fast Track: Putnam takes steps to repair its image

Joshua H. Brooks is determined to improve communication among analysts and fund managers at Putnam Investments LLC.

Mr. Brooks, 35, joined Putnam two weeks ago as managing director and director of global equities research. He succeeds William J. Landes, who was put in charge of developing the Boston-based firm’s alternative-investments business.

“My job really boils down to something pretty simple,” says Mr. Brooks, who previously served as chief investment officer for the value investing team at Philadelphia-based Delaware Management Co. Inc. “It’s to identify potential returns and then capture those returns for our clients.”

That, however, is easier said than done.

Even more so than some of its competitors, Putnam has been hit hard by the stock market’s downturn. That is mainly because its money managers feasted on go-go technology stocks in the late 1990s.

Mr. Brooks’ hiring marks the first public step by Charles E. “Ed” Haldeman Jr. to restore Putnam’s tarnished image. Mr. Haldeman was brought in as Putnam’s senior managing director and co-head of investments in October from Delaware, where he had been chief executive for two years.

New blood

Mr. Haldeman, who is widely credited with pulling off a turnaround at Delaware, is known for aggressively recruiting talent from other companies. While at Delaware, he hired executives from Conseco Capital Management Inc., Merrill Lynch & Co. Inc. and other firms.

“New blood indicates that Putnam is doing something about the problem,” Philadelphia-based fund industry consultant Burton Greenwald says of Mr. Brooks’ hiring. “It sends the message that things aren’t status quo. It’s a very positive thing.”

In trumpeting Mr. Brooks’ arrival, Putnam also announced that Justin M. Scott would oversee Putnam’s specialty growth group. That is in addition to his role as chief investment officer for the company’s small- and mid-cap core groups, as well as its core growth institutional group.

For his part, Mr. Brooks says he will focus on increasing dialogue between research analysts and portfolio managers. Putnam’s centralized research team, which is based in Boston but has offices in London and Tokyo, is responsible for assigning ratings and price targets to about 750 companies worldwide.

While portfolio managers bear the ultimate responsibility for ratings decisions, analysts play a critical role in the investment process.

“Our job is to be as strong a voice as is relevant in that decision- making process,” says Mr. Brooks. “Some of the [management] teams at Putnam really do rely directly, and almost completely, on the research team in terms of seeking returns.”

Like Mr. Haldeman, Mr. Brooks is clearly intent on cutting through the bureaucracy that has been known to plague Putnam’s investment group.

“In my view, an investment company is best run in an egalitarian manner, where one focuses on a hierarchy of ideas rather than a hierarchy of positions,” Mr. Brooks says.

Nevertheless, he insists he has been given no specific “marching orders” from Mr. Haldeman or Stephen M. Oristaglio, Putnam’s other co-head of investments. There are no plans, for example, to make significant changes to the size of Putnam’s 80-person research team.

The move to Putnam is a big step for Mr. Brooks.

With $125.5 billion in stock and bond assets, Putnam is the nation’s fifth-largest fund company. By comparison, Delaware ranks at No. 57 with $10.5 billion in such assets.

Despite Putnam’s problems in recent years, Mr. Brooks says he had no qualms about leaving the subsidiary of Lincoln National Corp.

“I feel like I’ve been given the chance to jump in on the ground floor of what I believe will be an incredibly fun and successful period at Putnam,” he says.