GLOBAL – Marsh & McLennan says strength in its Mercer consulting arm and Marsh insurance unit offset weakness at asset management division Putnam in the second quarter.

According to MMC figures released today, Putnam has lost almost a third of the institutional assets it had under management a year ago, before the late trading affair that rocked the US mutual fund industry and led to the departure of chief executive Larry Lasser.

“MMC chairman and chief executive Jeffrey Greenberg said: “Strength in Marsh and Mercer more than offset weakness at Putnam.” Mercer’s operating income was up 14% while Putnam’s income slid 24%.

Mercer’s revenues in the second quarter increased rose 12% to 773 million dollars from 690 million dollars and operating income rose to 113 million dollars from 99 million dollars.

“Revenue growth was particularly strong in its human resources practices in Europe and Asia and in management and economic consulting,” MMC added. Retirement services revenues were flat on an underlying basis at 339 million dollars.

Meanwhile, income, revenues and assets under management at Boston-based Putnam Investments all fell.

Its revenues fell 10% to 446 million dollars and operating income declined 24% to 95 million dollars. Total assets under management at the end of June were 213 billion dollars – down 20% from 267 billion dollars a year earlier.

Within that, institutional assets under management have fallen to 65 billion dollars, down 32.3% from 96 billion dollars a year ago.

“Putnam’s business is not where we want it to be,” said Greenberg. “However, we see some signs that are encouraging, Redemptions occurred at a decreasing rate.” He cited improved investment performance and increased marketing efforts.

“It has reduced its costs, streamlined its management, and made a number of key promotions and new hires in the investment division.”

Overall, MMC said net income rose seven percent to 389 million on revenues up six percent at three billion dollars. “MMC had a good quarter,” Greenberg said.

Last month Mercer and Putnam combine said it would combine the defined contribution administration business of Putnam Investments and Mercer HR Outsourcing.