Financial-services firm Marsh & McLennan's (NYSE:MMC) glacial pace continues, but management isn't sitting still. It's working hard to recapture at least some of the company's former glory. A recent move helped shore up some much-needed capital, and a long-anticipated recovery could be even closer on the horizon.

Last week, Marsh Mac finally sold its struggling Putnam Investments money-management division. The sale is expected to bring $2.5 billion in net proceeds, allowing management to repurchase $1.5 billion in stock over the next year. It also announced a commitment to reduce Marsh's hefty $3.6 billion debt load by $1 billion over a similar time frame.

The added capital also frees Marsh to focus on growing its remaining insurance-brokering, consulting, and Kroll risk-consulting and technology segments. Besides the consulting unit, which reported snappy second-quarter sales growth of 16%, the others need work. The insurance unit includes the Marsh and Guy Carpenter brand names and accounts for nearly half of the company's total sales. It continues to struggle on the top line, reporting a meager 2% increase for the quarter. Kroll is the smallest unit, but it also experienced a 6% drop in quarterly revenue.

So while total sales grew a respectable 7% during the quarter, Marsh is still struggling to turn a profit and generate income. Second-quarter net income remained flat from the year-ago period; the company has yet to recover from a challenging 2005 in insurance brokering, not to mention a substantial subsequent settlement with erstwhile New York Attorney General Eliot Spitzer.

During the earnings conference call, management highlighted that 2005 was a year of survival, 2006 was devoted to stabilizing the business, and 2007 is the first year in which it can return to focusing on growth initiatives. It also mentioned that Marsh is once again attracting and retaining employees after they began jumping ship to archrivals such as Aon (NYSE:AOC), Brown & Brown (NYSE:BRO), and Willis Group Holdings (NYSE:WHS).

Marsh Mac doesn't expect improved profitability until the end of this year or early 2008. It's targeting a 4%-5% increase in margins by the end of 2009, suggesting that an overall recovery is still some time off. Its current strategy involves ramping near-term spending to prepare for a return to the double-digit sales and earnings growth for which it was once known. Time will tell whether Marsh Mac's increased advertising, recruiting, and technology investments will pay off. In the meantime, $2.5 billion in freed-up capital definitely provides some breathing room.

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Marsh Mac is an Inside Value recommendation.

Fool contributor Ryan Fuhrmann is long shares of Marsh Mac but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.