Reynolds Promises New Products, Says He is No Cost-Cutter
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Thursday, June 12, 2008

Reynolds Promises New Products, Says He is No Cost-Cutter

Two hours after news broke of his appointment at Putnam Investments, Bob Reynolds talked to reporters in a conference call in which he fielded questions about outflows, whether he intends to ditch the Putnam brand, and what he plans to do in the defined contribution market.

And apparently, old habits die hard.

At one point during the call, Reynolds, who spent 23 years with Fidelity before leaving in the middle of last year, began his sentence with "Fidelity," when he actually meant Putnam. "That's a Freudian slip, by the way," he quipped.

Before the Q&A portion of the call began, Reynolds took a moment to narrate how he ended up at Putnam.

"You might say, 'Why Putnam?'" Reynolds said. He praised the Putnam brand, noting that "over the last 70 years it stood for excellence in money management. It has had ups and downs like any investment management firm has. But it was, and has been, positioned to take advantage of what's going to happen next in the business."

He said he was presented with a lot of opportunities after his departure from Fidelity on June 30 of last year. "One thing was very clear," Reynolds said, "I wanted to stay in the industry, I wanted to work with a long-term player with tremendous upside. That led me to Putnam very early on."

Reynolds said his first meeting with Putnam Investments chairman Jeff Orr took place last August.

Addressing the question on outflows at Putnam, Reynolds said some asset classes such as fixed income and money market have been seeing positive flows. "In equities, that's not the case. It's something the team is working on as we speak."

"We're putting additional resources on it, looking at people outside of Putnam, taking a hard look at research," he continued.

Putnam, Reynolds said, will be releasing additional products in the next six months, but he declined to go into specifics.

Reynolds also stressed that he has no plans to change the Putnam brand, which he described as an asset. "It's a valuable name. We're going to keep it," he said.

As for the defined contribution market, Reynolds, who engineered Fidelity's 401(k) bundled product alongside Peter Smail, said Putnam will play a "major role" in that market.

"We will look at many many ways in which we can participate in the defined contribution area, whether it be on the asset management side, whether it be on the recordkeeping side."

Asked by a reporter if he will doing some cost-cutting, Reynolds said that cutting costs "is not on my agenda."

"No company has ever cut their way to success or greatness," he said.

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