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Monaghan Assumes Retail Leadership

When Putnam Investments brought on Richard Monaghan in December to head its retail mutual fund division, it was not hiring a stranger.

Monaghan had previously been with Merrill Lynch, one of Putnam's largest clients, where he was in charge of institutional business. Putnam is also one of Merrill's largest clients, so a working relationship had already been established.

Monaghan is replacing William N. Shiebler, who is retiring after building Putnam's retail business from $35 billion to over $200 billion since 1990. To find a successor was not easy but when Monaghan came under consideration, he seemed like a natural fit, said Thomas J. Lucey, chief of Putnam Mutual Funds and Institutional Business. Lucey himself was promoted from head of Putnam's institutional business about a year ago and is Monaghan's new boss.

"Much of what I've done (since being promoted) is search out Bill's replacement," Lucey said. "He's a tough act to follow. You are replacing the best."

Monaghan is currently spending about half his time out on the road with Shiebler, meeting with clients to ease the transition.

"We're on a tour of the country seeing large accounts for the first quarter of the year," Monaghan said.

Monaghan, 44, started at Merrill in 1985 in Boston's institutional division as an account executive. In 1987 he was named the producing manager for Boston's debt desk and in 1992 he was appointed sales manager for the Boston office. In 1993 he was moved to New York where he was managing director and manager of the fixed-income office. In 1995, he was named to his last post at Merrill as managing director of U.S. debt and equity for the institutional client division.

Monaghan graduated from Princeton University in 1976 with a bachelor's degree in psychology. After graduation he worked for Procter & Gamble in product and sales management, and from 1993 to 1985 he was a producing sales manager at Bankers Trust in Chicago.

Although this past year was disappointing for Putnam - net mutual fund sales were down 40 percent largely because of redemptions - Monaghan hopes to build on Shiebler's success.

Monaghan says he will be expanding the wholesale force by 20 percent. Putnam has over $221 billion in assets under management in the retail sector.

The fact that Putnam is building its wholesale force reflects the fact that the company continues to consider service a top priority, said Monaghan.

"What we're trying to do is assist our advisers in building their total business," said Monaghan.

Monaghan says he will not have a problem switching from the institutional to the retail side of the business because in either case, what is important is focusing on the client.

"The experience I had at Merrill Lynch provides a good foundation for what I'm doing now," he said. At Merrill, Monaghan was in charge of a staff of 420. At Putnam, he will oversee 370, including wholesalers, marketing personnel and client service reps.

One of the most important tasks for managers now is responding to consolidation throughout the financial services industry and responding to the changing needs of clients who sell Putnam funds.

"Clients are becoming more sophisticated every day," Monaghan said.

He lists performance, sales and service as the areas that he will concentrate on as he begins his job.

"Putnam wants to be the best; above all a classy organization," Monaghan said.

Monaghan and Lucey said they were developing some new products but they declined to disclose details.

"It is our goal to provide products that our clients ask for," Lucey said.

Besides for having hired Monaghan, Lucey is proud of having hired Louise R. Kuo as managing director of corporate marketing in November. She was at Prudential Investments for nine years and was most recently senior vice president of marketing and strategy there. At Putnam, she will oversee marketing across the retail, institutional, defined contribution and international businesses.

Lucey expects the defined contribution market to become a larger share of Putnam's business and he wants to be one of the top providers of defined contribution services. Putnam runs over 2,000 401(k) plans.

"It's really an exciting business. It's really an immature business," Lucey said.