Putnam liquidates money market fund

NEW YORK (MarketWatch) -- A run on a money market fund managed by Putnam Investments, a subsidiary of Great West Lifeco Inc. has forced the company to liquidate the institutional fund. Putnam said that "significant redemption pressure" on Wednesday forced it to close the $15 billion Putnam Prime Money Market Fund. "Constraints on liquidity in money market instruments created the risk that in order to process redemptions, the fund would realize losses in selling its portfolio securities," said Putnam in a statement. "The Trustees determined to close the fund to ensure equitable treatment of all fund shareholders." The statement did not say when shareholders will receive their money, nor did it say whether the payouts would maintain the fund's $1 a share net asset value.

NEW YORK (MarketWatch) -- Money market funds saw nearly $90 billion of net investor cash pulled out on Wednesday, among the largest single-day drops in history.

Figures from iMoneyNet show that assets dropped to $3.35 trillion from $3.44 trillion, a fall of $89.2 billion.
Among the funds hit hardest by the redemptions was the $12.3 billion Putnam Prime Money Market Fund institutional fund, which saw such a severe run on its assets that Putnam Investments, a subsidiary of Great West Lifeco Inc. said Thursday it would liquidate the fund.

Figures from iMoneyNet show that $130 billion left prime institutional money market funds Wednesday. This follows $61 billion of redemptions on Monday and $37.2 billion of redemptions on Tuesday.

"This is the largest week of outflows that we've ever had," said Connie Bugbee, managing editor of iMoneyNet. "It's not even close." She added that some of the outflows, perhaps as much as $20 billion may be due to companies moving money around because Monday was quarterly corporate tax day.