Putnam’s parent acquires J.P. Morgan’s 401(k) service business
Putnam Investments and its parent company have quickly added more heft to their newly combined retirement business, acquiring J.P. Morgan’s Retirement Plan Services, the companies said Thursday
The deal will make the merged groups the second-largest record keeper and servicer of 401(k) assets, behind Fidelity Investments, according to Putnam’s parent company, Great-West Financial of Greenwood Village, Colo.
Terms of the deal, expected to close in the third quarter this year, were not disclosed.
J.P. Morgan has 200 retirement plan clients with 1.9 million participants and $167 billion in assets, as well as 1,000 employees. Putnam chief executive Robert Reynolds, who also was recently named chief of Great-West Lifeco US, said he expects to keep J.P. Morgan’s employees.
Together, the firms will handle record keeping for 6.8 million workers and $387 billion in assets. They will have more than 3,000 employees.
While the business of managing money is more lucrative than servicing 401(k) accounts, Reynolds said that Great-West is interested in building its base because scale helps drive profits.
“You look at this is a scale play, but also a growth play,” Reynolds said. He said there could be other acquisitions ahead. “When these opportunities come along, it really complements what Great-West has, what Putnam has.”
Michael Falcon of J.P. Morgan Asset Management said in a statement that the deal will be good for clients and for employees, calling Great-West “an ideal acquirer for this business.’’
J.P. Morgan’s 401(k) servicing business is based in Kansas City.