Putnam announced on Tuesday that it is taking steps to enhance its small-cap equity capabilities. Putnam believes small-cap equity is an area of opportunity for active managers, according to Aaron Cooper, chief investment officer for Putnam.
“We feel that there is a real opportunity in the small-cap space for an active manager to be able to add value and perform for clients,” Cooper told ThinkAdvisor.
“It’s a space that’s less efficient than most other areas of the market,” he added. “We feel like we’ve generated some really good stock picking over time, and if you can invest behind the right talent base and run money in a somewhat more concentrated way with fewer holdings, you can really deliver in the space.”
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Effective March 31, David Diamond, formerly of The Boston Co. and High Rock Capital, will join Putnam as a portfolio manager on the Putnam Small Cap Value Fund. He will be co-manager with Eric Harthun until Harthun retires as the end of 2017.
Putnam is also expanding its analyst team with Bill Wiese, who worked with Diamond at The Boston Co. and High Rock. Putnam’s small-cap equity team now numbers eight analysts.
Putnam believes research is critical to investment in the small-cap equity space, and is naming several of its small-cap analysts as managers of various funds. Kate Lakin, co-director of equity research, will manage the Capital Opportunities Fund, taking over for Pam Gao, who is leaving the firm at the end of March.
The International Capital Opportunities Fund will be managed by Karan Sodhi, Spencer Morgan and Andrew Yoon as of March 31. At the same time, Bill Monroe will take over the Small-Cap Growth Fund.