F.L.Putnam Investment Management Company, the almost 40-year-old investment and wealth management firm, said today that it had acquired Salem Capital Management, a firm in Woburn, Mass., with some $230 million in assets under management.

F.L.Putnam, which operates from several offices in New England and New York City, said that it had brought on board Salem’s co-founder Hal Rubin and its president Kim Ratcliffe, as well as one operations person. F.L.Putnam now has $5.4 billion in assets under advisement, as well as 84 employees, including 35 client advisors.

Rubin and Ratcliffe will be based in Lynnfield, Mass. The deal closed on June 30.

Tom Manning, F.L.Putnam’s president and CEO, said in an interview with Financial Advisor that his firm had begun talks with Rubin and Ratcliffe at the end of 2019, but the deal had been put off by the outbreak of Covid-19. F.L.Putnam has a long track record as an investment manager with many approaches in its style bag, including a sustainable investing track that has been a big draw. But Salem’s investment management team brought a special value investing style that complemented F.L.Putnam’s efforts, Manning said.

“In our firm, they were going to be able to continue to practice their investment management philosophy,” Manning said of the Salem advisors, “and possibly be introduced to new clients where that strategy would be a fit.” Salem’s clients, meanwhile, will have the opportunity to work with and partner with F.L. Putnam’s financial planning team. Manning said that the deal was also prompted by Rubin’s thoughts about a succession plan and longer-term home for his clients.

F.L.Putnam was founded in 1983 as an investment management company. It became known for its proprietary stock and bond strategies, Manning said. “Today we manage a number of proprietary strategies that our clients use and other RIAs and consultants also use. So our investment team, when they are working with a client, it’s really looking to tailor the portfolio using the appropriate strategies. … We have a suite of income-oriented equity strategies, sustainable and social responsible strategies in both equity and fixed income, and a couple that are a little more growth-tilted, but we really don’t … have that pure value strategy [in our lineup]."

Salem’s strategy is “different from our equity income strategy, and it adds a new flavor to the lineup,” he said.

Manning said that his firm is generally trying to generate solid returns with as little volatility as possible, and that F.L.Putnam is conservative in its growth investing style rather that focused on hyper-growth. The firm’s clientele is diverse, he said, and requires diverse strategies.

“When we have critical masses of clients that have certain needs we tend to create capabilities to meet those needs,” he said.

The deal comes as a fortuitous time, obviously, as the value style has begun to outperform growth following many years of trailing. While the broad market has plunged this year, the S&P 500 Value index has fallen only 10.8% while its growth counterpart has fallen by 23%.

Manning conceded that clients were not knocking down the door for a value strategy for the years leading up to the pandemic. But he said the timing of the new acquisition was more about having more choices for clients than taking advantage of a market shift.

“Go back to 2019 and value was clearly out of favor,” Manning said. “So our thought around that was really more diversification of the product capability and the solution set to meet the needs of our clients. We’ve been long of the opinion that growth was not going to last forever as the dominant investment style and that [reversal] was long overdue. It took the new Federal Reserve interest rate cycle to change that dynamic. So the timing [of the acquisition] has been great in that perspective and has been right in the sweet spot of what is working today.”

The transition of clients’ assets from one style to another can be expensive and it’s the diverse set of options that’s more important than a shift to any one style, he said.

F.L.Putnam’s acquisition activity has been targeted, he said. In 2019, the firm announced its plan to build out its financial planning capability by adding Financial Focus, the Wolfeboro, N.H., a firm run by Susan John, the former CFP Board chair. The firm opened an office in Providence, R.I., by hiring a team under the leadership of Thomas Fay to build its bench in the Rhode Island community.

The firm now has offices in Maine, New Hampshire, Rhode Island, Massachusetts and New York.