Several news outlets reporting on Power Financial's annual meeting this week zeroed in on comments about Putnam Investments made by the Canadian company's CEO, Jeffrey Orr. Power expects to close its deal to buy Putnam sometime this quarter, and Orr predicted it will be at least another year before the struggling fund firm sees a profit. He also defended the new acquisition by saying its outflows, after a period of high volume, are leveling off.

But a quick look over the quarterly report of Putnam's seller, Marsh McLennan -- released yesterday -- suggests he could have recruited other figures to argue his cause. For the quarter ending March 31, 2007, Putnam's revenues were $356 million, with a net operating income of $75 million. That's compared with revenues of $345 million and a net operating income of $64 million for the same quarter in 2006. That's an increase in net income of $11 million, or 17 percent. In other words, although AUM has faltered year-to-year, profitability is increasing. Counterintuitive, but money managers can bleed assets and still be profitable.  

Edited by: Marie Glancy


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