Bob Reynolds continues to make his mark on Putnam, this time with two new mutual funds that invest in leveraged companies. On Monday the Boston-based fund firm revealed the Putnam Capital Spectrum Fund and the Putnam Equity Spectrum Fund, both managed by Fidelity vet and Andover Capital founder David Glancy, who joined Putnam earlier this year as a managing director (see MFWire, 2/19/2009).
Reynolds praised Glancy for being "at the forefront of assessing undervalued, leveraged companies."
"Today, many leveraged companies offer attractive investment opportunities, and few are better at uncovering and capitalizing on these opportunities than David Glancy," Reynolds stated.
Both funds utilize performance-based fees, similar to the absolute return funds Reynolds launched in January (see MFWire, 1/13/2009).
Company Press Release
BOSTON, May 18, 2009 – Putnam Investments today announced that it has
launched two new funds that collectively invest across the full spectrum of
securities of leveraged companies, including stocks, bonds, bank loans, and
convertible securities. Putnam Capital Spectrum Fund and Putnam Equity
Spectrum Fund will both be managed by veteran portfolio manager David
Glancy, who joined Putnam earlier this year after two decades of
specializing in industries of leveraged companies at Andover Capital and
Fidelity Investments.
Putnam Capital Spectrum Fund pursues total return by
investing in the securities of leveraged companies. Management aims
to select the most attractive securities anywhere within a company’s
capital structure, including stocks, bonds, bank loans, and
convertibles.
Putnam Equity Spectrum Fund (Class A: PYSAX) seeks capital appreciation
through investments in the equity securities of leveraged companies.
Using deep analytical research and investment experience in this
area, management seeks to uncover mispriced stocks of leveraged
companies, creating the potential for these stocks to outperform
broad market averages.
“Today, many leveraged companies offer attractive investment opportunities,
and few are better at uncovering and capitalizing on these opportunities
than David Glancy,” said Putnam Investments President and Chief Executive
Officer Robert L. Reynolds. “For more than two decades, David has been at
the forefront of assessing undervalued, leveraged companies. His career
spans the history of leveraged investing, from the leveraged-buyout wave of
the 1980s and the private equity wave of the 2000s to the credit crisis of
today, and he has amassed an outstanding performance record along the way.”
The leveraged company funds’ investment processes rely on fundamental
research by analyzing corporate balance sheets and capital structures to
identify the securities with the greatest total return potential. Types of
leveraged companies the funds will seek include capital-intensive
businesses; early-stage growth companies (rising stars); former
investment-grade companies (fallen angels); and companies in special
situations, such as restructurings, bankruptcies, or leveraged buyouts. For
investors willing to assume the volatility and other risks of these
investments, investing in leveraged companies can provide a level of
diversification when added to a traditional equity or fixed-income
portfolio.
Glancy has access to all of Putnam’s expanded research capabilities,
including the High Yield Credit team and the Small- and Mid-Cap Equities
group, which combined, cover most of the leveraged company universe.
Although Putnam Capital Spectrum Fund and Putnam Equity Spectrum Fund
invest in companies that may be highly leveraged, they do not themselves
utilize leverage as a primary investment strategy. Both funds also have an
innovative management fee structure in which the fee adjusts based on fund
performance. This feature aligns the interests of the fund manager with
those of shareholders, similar to the approach taken by the Putnam Absolute
Return Funds. Launched in January, the Putnam Absolute Return Funds, the
industry’s first suite of target absolute return mutual funds.
“There are a lot more opportunities among leveraged companies today than in
the past; debt burdens are higher and earnings recovery is less certain
than in the previous two recessions,” said Glancy. “As a result of the
volatility and market dislocation we see today, leveraged companies can
provide exceptional upside potential for investments across their capital
structures, and we look forward to identifying and exploiting those
opportunities to generate strong returns for our shareholders.”
Glancy joined Putnam Investments in 2009 from Andover Capital, where he was
a founding partner and portfolio manager. Previously, he generated notable
performance during his 13-year tenure at Fidelity Investments, where he was
the only portfolio manager to manage both equity and debt funds. Among the
funds he managed were the Fidelity Capital & Income Fund, the Fidelity
Advisor Leveraged Company Stock Fund, and the Fidelity Leveraged Company
Stock Fund, which he managed from its inception in 2000 until leaving the
firm near the end of 2003. For the one-year period ending June 30, 2003,
Mr. Glancy managed the number-one fund in Lipper’s Capital Appreciation
category.
NOTE: For more information on Putnam Spectrum Funds, go to
http://www.putnam.com/individual/spectrum-funds/
About Putnam Investments
Founded in 1937, Putnam Investments is a leading global money management
firm with over 70 years of investment experience. At the end of April 2009,
Putnam had $99 billion in assets under management. Putnam has offices in
Boston, London, Tokyo, Singapore, and Sydney. For more information, go to
www.putnam.com.
For any Putnam fund, request a prospectus from your financial
representative or by calling Putnam at 1-800-225-1581. The prospectus
includes investment objectives, risks, fees, expenses, and other
information that you should read and consider carefully before investing.
Putnam mutual funds are distributed by Putnam Retail Management.
Putnam Absolute Return Funds are not intended to outperform stocks and
bonds during strong market rallies.
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