The CEO of Marsh & McLennan Companies hopes acquisitions can rescue its distressed mutual fund unit, Putnam Investments, reports Bloomberg.

In a February 14 conference call to discuss fourth quarter earnings for 2005, Michael Cherkasky, MMC's chief executive, struck a sanguine tone, predicting 2006 will bring growth in every one of Marsh's businesses but Putnam.

As for the Boston-based asset management company, according to Bloomerg, Cherkasky says he will "fix" it this year. He hinted this would involve an outlay of cash. Last month he told Reuters the company would pursue "smaller acquisitions rather than selling businesses."

It's been thirteen months since MMC – parent company to Marsh, the world’s largest risk and insurance services firm – settled with New York Attorney general Eliot Spitzer for $850 million over accusations of bid-rigging. Plagued by its own regulatory troubles, poor fund performance, and an exodus of clients, Putnam is seen by most observers as a drain on MMC's regrouping efforts. Last week’s conference call brought the latest denial that a sale is imminent.

"We're keeping Putnam: I just want to make sure that I do say that clearly," said Cherkasky, in response to a question from Bear Stearns analyst David Small during the company's earnings call. "Putnam is a great, brand-name company that has been wounded, and it is this shareholder base that deserves to profit from the recovery ... in fact, we have a whole series of compelling reasons why we don’t think it's [in the] interest of our shareholder base” to sell, he said.

In his opening remarks, the MMC chief maintained his organization is "a better-positioned company than it was a year ago." While conceding MMC has faced "difficult circumstances" of late, Cherkasky pointed to its refinancing of debts and introduction of new leadership in 2005 as a basis for cautious optimism. "We believe we are headed in the right direction at MMC, and that 2006 will be a better year, with higher revenues, higher margins, and more profits than 2005." 

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