BOSTON -- Putnam Investments, which suffered billions of dollars of outflows after being charged by regulators with trading abuses, said on Monday it has reopened two of its closed funds to new investors.

Canada's Power Financial Corp. is buying Putnam from financial services firm Marsh & McLennan Cos. for $3.9 billion in a deal that is expected to close by the middle of this year.

Putnam said it reopened the Small Cap Value Fund and the High Yield Advantage Fund to new investors after a review showed they were at more manageable asset levels and there "were more opportunities currently available in the small cap value and high yield markets."

Fund companies generally prefer a steady flow of new money rather than bursts of fresh cash and sometimes close portfolios to allow fund managers to better put their assets to work.

The Small Cap Value Fund, which invests in stocks, currently has assets of about $772 million after closing to new investors in 2002. The High Yield Advantage Fund, which invests in bonds, closed to new investors in 1998 and now has $810 million in assets.

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Boston-based Putnam's assets plunged to about $192 billion as of end-December from about $371 billion in 2000. Its former President Lawrence Lasser was forced to resign in 2003 and last month agreed to pay $75,000 to settle charges of secret payments to brokers.

Assets started falling during the bear market of 2000-02 and despite the stock market recovery, the decline continued as Putnam was charged with fraud in the market-timing scandal in 2003. Putnam settled by agreeing to pay about $193 million in fines and restitution.

According to fund flows research firm Financial Research Corp. (FRC), Putnam suffered the biggest outflows among fund groups of $14.91 billion from its stock and bond funds in 2006. But this was an improvement over the $21 billion outflow seen in the previous year, FRC said.

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