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Deals & People September 18, 2008
Market Turmoil Sparks Putnam Fund Shuttering
Faced with extraordinary market volatility, the Board of Trustees closed the institutional Putnam Prime Money Market Fund, effective Wednesday at 5 p.m.
Reported by Fred Schneyer
A news release by the Boston-based Putnam said the move was sparked by events Wednesday.”Serious constraints on liquidity in money market instruments created the risk that in order to process redemptions, the fund would realize losses in selling its portfolio securities,” Putnam said. “In the face of these challenges, the Trustees determined to close the fund to ensure equitable treatment of all fund shareholders.”
The company said the fund had no exposure to the financial services companies at the heart of the Wall Street turmoil, including Lehman Brothers and Washington Mutual.
Putnam contended that the route it has taken “ensures an orderly distribution of assets in light of the current unusual market conditions and treats all shareholders in an equitable manner.”
Putnam and the Trustees are working to develop a detailed plan of distribution, with the goal of providing shareholders with the opportunity to receive distributions as expeditiously as possible, depending on market conditions.
The investment manager said the fund intends to provide more information about the asset distribution plan.