Putnam launches two funds that will invest in leveraged companies

By Devika Patel

Knoxville, Tenn., May 18 - Putnam Investments announced in a press release that it has launched two new funds that invest across the full spectrum of securities of leveraged companies, including stocks, bonds, bank loans and convertible securities.

Putnam Capital Spectrum fund and Putnam Equity Spectrum fund will both be managed by David Glancy, who joined Putnam earlier this year.

Putnam Capital Spectrum fund (class A: PVSAX) invests in the securities of leveraged companies. Management aims to select the most attractive securities anywhere within a company's capital structure, including stocks, bonds, bank loans and convertibles.

Putnam Equity Spectrum Fund (class A: PYSAX) will invest in the equity securities of leveraged companies. Using analytical research, management seeks to uncover mispriced stocks of leveraged companies, creating the potential for these stocks to outperform broad market averages.

The leveraged company funds' investment processes rely on fundamental research by analyzing corporate balance sheets and capital structures to identify the securities with the greatest total return potential.

Types of leveraged companies the funds will seek include capital-intensive businesses, early-stage growth companies, former investment-grade companies and companies in special situations, such as restructurings, bankruptcies or leveraged buyouts.

Glancy has access to all of Putnam's research capabilities, including the high-yield credit team and the small- and mid-cap equities group.

Although Putnam Capital Spectrum fund and Putnam Equity Spectrum fund invest in companies that may be highly leveraged, they do not themselves use leverage as a primary investment strategy.

Both funds also have a management fee structure in which the fee adjusts based on fund performance.

"There are a lot more opportunities among leveraged companies today than in the past; debt burdens are higher and earnings recovery is less certain than in the previous two recessions," Glancy said in the release. "As a result of the volatility and market dislocation we see today, leveraged companies can provide exceptional upside potential for investments across their capital structures."

As previously reported, Glancy joined Putnam from Andover Capital, where he was a founding partner and portfolio manager. He has two decades' experience, specializing in industries of leveraged companies at Andover Capital and Fidelity Investments. He has a bachelor's degree from Tulane University and a master's degree in business administration from Emory University.

Putnam is a Boston-based money management firm.

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