Make a Quick Buck Off Putnam's Purchase

The chairman of Putnam's fund trustees is vowing that investors will suffer little if any disruption as a result of the company's sale.

"One of the things that attracted the board to this was the likelihood that very little will change," John Hill told me Wednesday, just hours after it was announced that Putnam would be sold to Canada's Power Financial for $3.9 billion.

"I think we'll see the same lineup of funds a year from now, and we'll see the same portfolio managers -- as long as performance remains strong in the areas where it has been strong, and it continues to improve in the areas where it still needs improvement."

Hill chairs the trustees who oversee the funds on behalf of the investors.

One thing to watch: Putnam's 11 closed-end funds. "We're having a board meeting next Thursday and Friday, and Putnam is coming forward with a series of recommendations across the board with regard to the closed-end funds," Hill said. "Over the next week to 10 days we may announce some proposals. We like closed-end funds, and we're looking at ways to modernize them going forward."

Valuable Information

Hill declined to indicate what the changes might be, saying "these are publicly traded funds." In doing so, he tacitly acknowledged that the proposals might have an impact on the closed-end funds' price. Regulations bar the ad hoc release of price-sensitive information, because a private investor could work an angle on the deal if the funds start to move up.

And there's reason to think they might.

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