According to a report in the Wall Street Journal today, insurer Marsh McLennan has reached a tentative agreement to sell its Boston-based fund manager Putnam Investments to Canadian conglomerate Power Corp for US$3.9 billion. Power Corp is the biggest mutual fund owner in Canada.
Putnam, whose sale needs the approval of shareholders, was put up for sale in September. The firm has US$187 billion in assets under management, the outflow of assets through mutual fund shareholder redemptions having finally stabilised in October, three years after the form got caught up in the 2003 market timing scandal.
Power Corp controls Canada’s largest mutual fund family through its stake in Winnipeg’s IGM Financial Inc, parent of Investors Group and Mackenzie Financial Corp. It also owns one of North America’s largest insurers, Great-West Lifeco Inc.
Power Financial is led by Jeffrey Orr, former CEO of IGM Financial and investment bank BMO Nesbitt Burns. Power Corp. is controlled by Paul Desmarais.