Bob Reynolds, the former Fidelity executive, has taken additional steps to make his mark upon Putnam Investments, announcing November 17 that the firm will lay off a total of 47 people, including 12 portfolio managers, from its 2,500-person workforce and will eschew Putnam's traditional team-based approach of managing money in its equity mutual funds in favor of a "decision-making process that vests full authority and responsibility with individual fund managers." The steps announced by Reynolds, who became CEO of Putnam in July 2008, include merging six equity funds into larger "lower-priced" funds, according to the company.
The merged funds are Putnam's Capital Appreciation Fund, Classic Equity Fund, Discovery Growth Fund, New Value Fund, OTC & Emerging Growth Fund, and Tax Smart Equity Fund (see list at bottom of article for more information).
In a personnel move that the company said was unrelated, Jeffrey Sacknowitz was named as the new manager for Putnam International New Opportunities Fund.
In announcing the changes, Reynolds said Putnam would reward "top-quartile performers for delivering excellent, long-term returns to shareholders." Under a redesigned compensation plan, those top-quartile managers would be eligible for full bonuses (top decile performers "may receive significantly more"), while bottom-quartile fund managers would "typically receive no bonus." There would be similar incentives for the remaining research analysts whose equity recommendations pan out.