While vacationing in the south of France this past September, Mark Turner, lead manager of Scudder, Stevens & Clark Inc.'s global bond funds, received an intriguing call from an executive with archrival Putnam Cos. Could Turner meet with Lawrence J. Lasser, Putnam's chief executive, who was then visiting Paris? Turner could.
On Oct. 16, Turner resigned from Boston-based Scudder to become managing director and chief investment officer of Putnam's global fixed-income division, overseeing $4.3 billion in assets. Putnam's approach "showed Mark early on how anxious Putnam was to have him join the team--to have the original solicitation made by the chief executive in a chateau in the south of France," says Gary N. Coburn, chief of Putnam's U.S. Fixed Income Investments and Turner's new boss.
Why Putnam, another Boston-based firm, was so anxious is no mystery. Although largely unheralded, Turner, 40, has one of the more impressive performance records in bond-fund annals. Working with Scudder's crack research department, he led the no-load $750 million Scudder International Bond Fund to a No. 1 ranking in its category for the two-, three-, and four-year periods, according to Lipper Analytical Services Inc. For the four-year period, Turner's fund had a cumulative return of 83.09%, well above the group average of 53.74%. This June, the fund got the first five-star rating given in the world bond category by mutual-fund rating service Morningstar Inc.
"This guy has shown staying power in an area of investing--fixed income--where people have a secure sense, but where it's very easy to take a big hit," says Lipper international editor William McBride.
CONTRARIAN WAYS. Even more spectacular, Turner humbled competitors during the European currency crisis in September. While the Van Eck World Income Fund and the T. Rowe Price International Bond Fund fell 6.95% and 4.71%, respectively, for the three-week period ended Sept. 24, Scudder's International Bond Fund was basically flat, down 0.25%. The overall average for world bond funds for the period was -2.05%, a big decline for bond funds.
Turner managed to avoid the carnage by staying away from some of the high-yield bonds denominated in such currencies as the Italian lira that other managers had stocked up on. And he hedged the currencies in his funds individually, rather than using the German mark as a proxy and expecting that the other currencies would remain in a narrow band. The "proxy" strategy came unglued when the lira, British pound, and other currencies plunged against the German mark.
`INSTANT DRAW.' Turner, who was born in England, has always been venturesome. You can tell by the way he chooses to relax: skiing expert runs and sailing on high seas. Before joining Scudder in 1989, he was managing director for fixed income with AIG Global Investors Inc. in New York and worked in London with Citibank's investment-management group for five years before that. His very first entry into the working world: helping run a record store owned by the Moody Blues.
Turner's decision is a coup for Putnam, which is considered more aggressive than Scudder. "He's an instant draw and gives their whole effort instant credibility," says Lori Lucas, an analyst with Morningstar. Like many fund families, Putnam has increased international offerings in recent years.
Turner will oversee the investment performance of global institutional and retail fund accounts. Putnam is stressing the institutional accounts, its fastest-growing asset class. "Our global fixed-income product is our centerpiece," says Thomas J. Lucey, Putnam's chief of institutional marketing.
After a few weeks at home with his wife and two young sons, Turner will start at Putnam on Nov. 2. He can't wait. "It's hard to be away from the markets," he says. "It must be like the feeling you have if you're a pitcher and you've been put in the dugout. You want to get back in the game." Especially if you're on a winning streak.