Putnam CEO Reynolds to Stay at Great-West After Franklin Deal

Putnam Investments CEO Bob Reynolds will not go to Franklin Templeton as part of its pending $925 million acquisition of Putnam, according to a spokesperson.

Reynolds, who had been at the helm of Putnam since 2008, will instead remain at Great-West Lifeco Inc., a Power Corp. of Canada firm, where he was CEO and president of its financial division through 2019 in addition to his CEO role at Putnam. Reynolds will keep running Putnam until the acquisition is closed, which is expected to happen in this year’s fourth quarter. He will also maintain his position as chair of Great-West Lifeco US LLC at least through the transition.

Franklin Templeton, a division of Franklin Resources Inc., announced on May 31 it had agreed to purchase Putnam in a “strategic partnership” that gives Great-West Lifeco a 6.2% stake in Franklin. Reynolds’ new role will be involved with the Franklin Templeton partnership, but the spokesperson did not have further details on his position or title. “In remaining with Power Corp. and Great-West Lifeco, Bob will in part be focused on the Great-West Lifeco and Franklin Templeton relationship,” the spokesperson said.

Reynolds will remain chair of PanAgora Asset Management Inc., a quantitative investment firm owned by Power Corp. that was not part of the Franklin deal, according to the spokesperson. He will also maintain his board seat at Empower Retirement, which is the country’s second largest retirement recordkeeper and is owned by Great-West.

Ignites first reported on the news of Reynolds staying at Great-West.

Putnam Transition

The integration of Boston-based Putnam’s roughly 1,200 employees into Franklin Templeton is still being worked through, according to the spokesperson. The San Mateo, California-based firm is planning to keep on Putnam’s investment portfolio managers as well as certain core products, a plan it announced on an investor call shortly after the deal was made public.

“We do not anticipate any portfolio manager changes or changes to Putnam’s investment process,” the spokesperson said Thursday. “We expect the brand will continue on key offerings.”

Franklin Templeton will purchase Putnam primarily with $825 million in equity up-front at closing and $100 million in cash 180 days after closing. The deal also includes as much as $375 million in contingent payments tied to revenue growth from the partnership. The deal is designed to speed up Franklin Templeton’s growth in the retirement sector and, if completed, would increase its defined contribution assets under management to about $90 billion, according to the announcement.

From Fidelity to Great-West

Earlier in his career, Reynolds held a senior position at Fidelity Investments, where he was part of a leadership team that built the firm’s 401(k) retirement division into the largest in the country, as well as making it the third largest asset manager in the U.S. behind BlackRock and Vanguard, according to the most recent data from ADV Ratings. Reynolds left Fidelity in 2007 after rising to vice chairman and chief operating officer , joining Putnam the next year.

In 2014, Reynolds and Edmund Murphy III were among the architects of what became the country’s second largest recordkeeper, Empower, by bringing together J.P. Morgan Retirement Plan Services’ large-market recordkeeping firm and Great-West Financial, which had already combined with Putnam Investments. More recently, Empower has taken on more large-scale retirement acquisitions, and this year it announced a restructuring to move further into consumer wealth management and participant advice.

During his time at Putnam, Reynolds advocated for active fund management at a time when many in the industry were pushing against it in favor of cheaper, passive investing strategies. In a 2018 interview with PLANADVISER, he discussed Putnam’s “Always Active” education campaign about the benefits of active fund management, while also giving his thoughts on environment, social and governance investment strategies and the promise of 2019 retirement legislation that became the Setting Every Community Up for Retirement Enhancement Act.