Great-West Life today announced that it has completed its review of Putnam Investments as an investment sub-advisor, and that it will terminate its relationship with Putnam on July 19, pending regulatory approval.

Great-West Life announced last November that it was undertaking a special review of Putnam in their capacity as an investment sub-advisor for some of its funds. Putnam, which sub-advises on $670 million in investment funds for Great-West, continued to act as sub-advisor during the review.

“We believe that Putnam has acted capably on behalf of our unit holders over the past decade, but with our review we have identified other international sub-advisors who we believe will enhance our international fund offerings,” said Rick Rausch, senior vice president of individual retirement and investment services at Great-West Life.

“Our clients have not been affected by the alleged actions of Putnam in the U.S.,” Rausch said. “Great-West Life holds all of our investment managers to high standards of stability, consistency, governance and performance.”

Late last year, the Securities and Exchange Commission found that Putnam committed securities fraud by failing to disclose potentially self-dealing securities trading by several of its employees. It also found that Putnam failed to take adequate steps to detect and deter such trading activity through its own internal controls and its supervision of investment management professionals.

In its settlement reached with the SEC, Putnam agreed to undertake significant corporate governance, compliance, and ethics reforms.

Coincident with its decision, Great-West Life has appointed three new investment sub-advisors to the Putnam funds.

The following new sub-advisor appointments are effective July 19, pending regulatory approvals:

  • UBS Global Asset Management for the International Equity Fund;
  • JP Morgan Fleming Asset Management for the International Opportunity Fund; and
  • Brandywine Asset Management for the International Bond Fund.

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