Bear stock sales late-'07 helped cut Putnam loss

By Muralikumar Anantharaman

BOSTON (Reuters) - Putnam Investments, battered by redemptions and poor performance, appears to have made a good move in late 2007 as it dumped Bear Stearns' stock while some of the most revered U.S. stock pickers were hoarding it.

The fund manager, Bear's biggest shareholder as of end-June, sold two-thirds of its stake in the Wall Street firm then and appears to have sharply cut losses that some rivals may be facing.

Putnam sold 4.43 million Bear Stearns Cos Inc BSC.N shares out of its total holdings of about 6.7 million shares of the stricken firm sometime in the fourth quarter of 2007, according to Reuters Knowledge, based on end-December filings.

At the end of June, Putnam had a 6 percent stake in Bear, or 7.03 million shares. As of end-December, it owned 2.24 million shares and was Bear's 10th largest institutional shareholder. Putnam is a unit of Canada's Power Financial Corp (PWF.TO: Quote, Profile, Research).

"They sold a majority of their stake in the fourth quarter. So given the recent turn of events that was smart. But I'm sure they still sold at a loss, nonetheless," said Wenli Tan, a mutual fund analyst at Morningstar Inc.

Bear shares plunged Friday and Monday as the investment bank faced a capital squeeze. It agreed on Sunday to be bought by JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) for $2 per share. Bear shares ended up 22.9 percent at $5.91 on Tuesday.

That's still a far cry from the $122.30 to $88.25 range the stock traded in during the fourth quarter of 2007.

Boston-based Putnam declined to comment on its holdings.