Pension board may sack two fund managers
One of the managers, Putman Investment managers, which oversees 237 million of cash on behalf of the NPRF, has been dragged into a financial scandal following accusations of fraud in the US and improper trading.
The board of NPRF, which has invested 8.4 billion of taxpayers’ money to pay for public pensions, will discuss the issue of dumping the fund manager when it meets for its regular board meeting later this month
Putnam was charged by the Securities and Exchange Commission with civil fraud on October 28 for allegedly allowing improper short-term trading in its mutual funds.
The investigation of trading abuses in the $7.1 trillion US mutual fund industry surfaced in September when New York State Attorney General Eliot Spitzer alleged them of engaging in illegal mutual fund trading that diluted returns for long-term investors.
“The market timing issue relates to the US mutual fund business, but some individuals were also involve in pan-European funds.
“Not that there is any allegations whatsoever that any of the funds managed (for the NPRF) had been disadvantaged. But still there is corporate governance issues,” a source said.
Another fund manager, Invesco Funds Group, has also has civil complaints filed against it.
Invesco Asset Management has 340 million of assets for the NPRF and their mandate will also assessed. Yesterday, Unilever, the world’s biggest food group, sacked Putman as one of its fund managers.
“Some firms including Unilever have chosen to move their investments and we respect that decision,” said Putnam spokeswoman Laura McNamara.
“At the same time, many other clients have expressed their trust and confidence in Putnam.”
She declined to comment on the Irish fund.
