There is a painting of a powdered jelly doughnut on the wall of a small private dining room at Putnam Investments. The work is said to be a favorite of Lawrence Lasser, the firm's chief executive. But this room is not about comfort food.
"This is where Larry takes you to shoot you," Thomas Lucey, the firm's recently retired sales chief, once said during an interview in that room.
Lucey was a rare breed at Putnam, able to joke about Lasser's often ruthless and domineering style -- and to survive it for 10 years.
Now, as the Boston mutual fund firm wrestles with a merciless market and poor performance in its largest growth-stock funds, the question is how Lucey's successor, Steven Spiegel, will handle those sticky meetings in the doughnut room.
Last month, Spiegel was named senior managing director in charge of global distribution and alternative investments.
The change at the nation's fourth-largest fund group, a unit of the brokerage Marsh & McLennan Cos, was barely noticed on Wall Street. But it represents a distinct shift in personality and approach in the top ranks of Putnam, at a time when the firm and the industry are facing the toughest competitive pressures in a decade.
To say that Lucey, 57, and Spiegel, 56, are different is an understatement.
Spiegel has spent the last six years running Putnam's international businesses and new efforts, such as the firm's joint venture with shop Thomas H. Lee Co, the Boston buyout shop. He is a Boston native, educated at Babson College, who spent 27 years in the brokerage business, mostly at Lehman Brothers in New York. He has a low profile within Putnam and is known to keep his thoughts close to his chest. He is comfortable sipping tea with the business elite in Tokyo, where he has learned to negotiate with executives who rarely say what they mean.
Lucey grew up in South Boston, the son of an MBTA auditor. A former military man who worked for IBM and the Boston Co. (an investment firm now owned by Mellon Financial Corp.), he is described as an open book, a manager who says what's on his mind. He is equally at ease sitting in a diner talking about funds with a broker as he is in a boardroom.
People who know both men say Spiegel has one thing Lucey did not have at the end of his tenure: Lasser's full backing. That can only help him, these people say, as he strives to become more visible to the managers who report to him -- some of whom were hired by Lucey -- and as he speaks before groups of top brokers who come through Boston this summer to learn, in part, whether they should maintain their confidence in Putnam funds.
And why shouldn't the brokers wonder what has happened at Putnam? A firm long considered conservative -- and known to stick like glue to the stated investment objectives of its funds -- Putnam nonetheless got caught up in the technology stock frenzy. Even after the market cratered, Spiegel said last week, "We stayed for too long with our tech weighting, and that hurt us."
For investors, the pain keeps on coming. Nearly all of Putnam's growth-stock funds have declined by double digits in 2001 and are faring worse than their benchmark indexes and at least half of their peers. Voyager, the flagship fund, with US$30 billion in assets, is down 15.6 percent, nearly double the 8 percent loss this year at the Standard & Poor's 500 Index. The fund ranks in the top 37 percent of its peers, according to Lipper Inc, while such funds as OTC & Emerging Growth and Vista rank near the bottom of the mid-cap growth pack.
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