House approves rule for ESG disclosure

The House last week approved a proposal requiring public companies to report environmental, social, and governance metrics for investors. The proposal passed with a 215-214 vote, according to published reports. The Securities and Exchange Commission is also reportedly considering rules on transparency for climate risk, board diversity, and other workforce issues.

Investors abandon millions in retirement accounts, study finds

A new academic report found that a total of $790 million in old retirement accounts had been abandoned by investors. The study, which examined unclaimed property in 2017, found that investors abandoned old IRA accounts and the accounts owners, who were 72½ or older, failed to take required minimum distributions. The median account total was $5,400, the report noted.

Many Millennials face savings challenges

Older Millennials starting their own families are facing challenges of trying to budget and include saving. Many are still paying off student debt. They are also trying to plan for retirement and save for their child’s college education. A recent study found that, due to college loan payments, 23% of Millennials reduced their retirement contributions. Another 27% delayed buying a home, and 24% cut back on emergency savings.

37 Capital Expands Structured Credit Capabilities with Hiring of Industry Veterans to Focus on CLO Strategies for Marketplace

BOSTON, June 21, 2021 – 37 Capital, the alternative investments business of Putnam Investments, today announced that it has bolstered its collateralized loan obligation (CLO) and broader leveraged loan capabilities with the hiring of three highly-experienced investment professionals.

Scott M. D’Orsi (Portfolio Manager), Eric C. Vander Mel (Analyst) and Stephen L. Newton (Analyst), who worked together at First Eagle Investment Management for more than six years prior to joining Putnam, bring dedicated focus to the active build-out of 37 Capital-branded CLO offerings. D’Orsi reports directly to Putnam’s Michael V. Salm (Co-Chief Investment Officer of Fixed Income) and Brett S. Kozlowski (Co-Head of Structured Credit) and will work closely with Kaitlin M. May, Chief Operating Officer of 37 Capital, on the launch of this business initiative.

“We believe that structured credit offers a complexity premium that can be harvested by sophisticated investment managers who are able to combine fundamental credit analysis of underlying collateral with a deep understanding of the various securitization vehicles utilized in this space,” said Salm.
May, who will also become Head of Global Institutional Management at the end of the month upon the retirement of Jeffrey L. Gould, added, “In bringing onboard three highly-skilled credit investment professionals in Scott, Eric and Steve, we are making a strong commitment to generating long-term value for institutional investors through new product opportunities that combine decades of corporate credit expertise with specific capabilities related to CLOs.”

Salm indicated that the three new hires, with deep backgrounds in leveraged loans, high yield bonds and fixed income trading, will join Putnam’s broader fixed income team with strong portfolio management and research expertise in non-investment grade credit markets. As a firm, Putnam has an extensive history of bringing structured product solutions to clients and currently manages approximately $30 billion in structured credit, including RMBS, CMBS, and various prepayment strategies as of May 28, 2021.

Prior to joining Putnam, D’Orsi was a Managing Director, CLO Portfolio Manager and Head of Liquid Loans at First Eagle Investment Management, where he launched the CLO business of its predecessor company and led the launch of a number of CLOs. Earlier, D’Orsi held positions at Spear Leeds & Kellogg, CIBC World Markets, BancBoston Securities, Bank of Boston and Fleet Financial Group. He earned a B.A. in Economics from Yale University and an MBA from Babson College’s Franklin W. Olin Graduate School of Business.

Vander Mel has more than 25 years of credit experience including syndicated loan CLO management. Before joining Putnam, he was a Managing Director, Senior Analyst, at First Eagle Private Credit Advisors, where he specialized in broadly syndicated loan CLOs. Earlier, he held positions with Knight Capital, FBR Capital, Morgan Stanley, Fleet Securities and Fleet National Bank. He holds a B.A. in Economics from Colby College.

Newton brings more than 15 years of experience in fixed income research, CLO structuring and portfolio management. Most recently, he was a Director, Senior Credit Analyst, at First Eagle Private Credit Advisors. He previously held positions with Citizens Financial Group, Social Finance, Eaton Vance Management and Banc of America Securities. He earned a B.S. in Finance from Boston College and an MBA from Northwestern University’s Kellogg School of Management.

About 37 Capital

37 Capital is the global alternative asset management business of Putnam Investments, providing investment solutions across equities and credit. Portfolio managers employ an opportunistic investment approach that combines intensive fundamental research with a consistent focus on downside protection.

About Putnam Investments

Founded in 1937, Putnam Investments is a global money management firm with over 80 years of investment experience. At the end of May 2021, Putnam had $198 billion in assets under management. Putnam has offices in Boston, London, Frankfurt, Tokyo, Singapore, and Sydney. For more information, visit putnam.com.


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Senate bill proposes new rule for 401(k) withdrawals

Two senators last week introduced a bipartisan bill that would allow savers to take a penalty-free emergency withdrawal of $1,000 annually from 401(k) plans and individual retirement accounts. The Enhancing Emergency and Retirement Savings Act of 2021 would allow for one emergency distribution per calendar year. Savers would also be required to pay back the amount before any other distributions could be made from the plan.

Social Security uncertainty could cost investors

Uncertainty about the future solvency of Social Security could lead investors to make financial planning mistakes, according to a recent report from the National Bureau of Economic Research. The study found that indecision could cost younger and middle-age workers more than two months of earnings. The study noted that two big mistakes that savers could make are assuming their benefits will remain the same, even after the program becomes insolvent, or preparing their retirement savings strategy based on cuts that do not actually happen.

Rise in early retirements reveals income inequality

The pandemic has resulted in a surge of early retirements. Some are voluntary, while others are due to workers being forced to exit earlier than expected, according to a new study. About 1.7 million Baby Boomer workers retired early last year. The data revealed income inequality. Some savers, with investments, had sufficient income to retire. At the same time, many lower-paid workers, without a lot of savings, do not have enough resources to retire and need to find new jobs. Retiring prior to full retirement age means a reduction in Social Security benefits that could total up to 30%.

Investor trust on the rise

For the first time in more than a decade, the majority of investors surveyed recently said they trust that financial services firms are looking out for their best interests. The research focused largely on the financial advisory segment. The survey comprised affluent investors with more than $250,000 in investable assets and the near-affluent who earn more than $125,000 annually and are younger than age 45. The survey has included the question about trust since 2008.

Will the administration advance a new fiduciary rule?

The administration may advance proposals for a new, stricter fiduciary rule for retirement plan advisors and sponsors, according to a recent report citing retirement plan industry executives. The administration may also promote the inclusion of environmental, social, and governance (ESG) investments in retirement plans.

Savers improved financial plans during pandemic

A recent survey found that one third of adults said they have improved their financial discipline during the pandemic. Most respondents said they expect their new habits of saving and budgeting will continue post-crisis. During the past year, 83% of respondents said they created, reviewed, or made changes to their financial plans. An additional 17% said they did not have a plan prior to the pandemic.