London-based MFS Investment Management has launched a contrarian capital fund.
The unconstrained global equity fund is an actively-managed strategy that aims to “limit downside by employing a bottom-up fundamental approach that looks for areas of controversy in the market so as to identify asymmetric investment opportunities”.
A controversy can take many forms. It can be anything from a conflict over cyclical versus structural pressures to a temporary impairment of the business model.
The fund seeks to buy businesses trading at a discount to their intrinsic value and where a margin of safety exists on the price paid and a strong balance sheet provides enough time for the thesis to play out.
The security selection will be driven by global, bottom-up fundamental analysis and an approach unconstrained by the benchmark.
Each security will be screened for value, but also for change, which is arguably more difficult and requires a dedicated team of global analysts familiar with the businesses and industries involved. The fund seeks opportunities regardless of sector, geography, country or market capitalization; sector and region positioning are a result of individual stock-picking.
The fund will be managed by co–portfolio managers Anne-Christine (AC) Farstad and Zahid Kassam, who will be responsible for the portfolio construction process, position sizing, all buy and sell decisions and risk assessment.
Matt Weisser, Managing Director for Europe, said: “At MFS we view product development as a critical success factor, and we want to offer a range of vehicles that can efficiently deliver our investment capabilities and create long-term value for our clients.
“Thus we are pleased to launch this new global equity fund. It provides investors who are comfortable going against the crowd the opportunity to exploit the divergence between price and value in order to uncover hidden opportunities where others see uncertainty.”
The fund is domiciled and regulated in Luxembourg, structured as a SICAV S.A. and registered in 14 countries across Europe.
