Putnam closes money fund after institutions pull cash

BOSTON -- Putnam Investments has suddenly closed a $15 billion money-market fund after institutional investors quickly pulled out cash.

The Boston-based money manager says its board voted to close the Putnam Prime Money Market Fund effective at the close of business Wednesday. Putnam will distribute all fund assets to institutional clients.

The company said it would be premature to say whether shareholders would get $1 per share. Investors may be paid in cash or securities.

The fund had required a minimum $10 million initial investment.

Putnam says the closure is not linked to the credit quality of the fund's holdings, but is a reaction to "marketwide liquidity issues."

Putnam says investors pulled out money en masse Wednesday, even though the fund has maintained a safety benchmark of holding at $1 in assets for each dollar invested.

Putnam says the fund has no exposure to the financial firms Lehman Brothers, Washington Mutual or AIG.