MFS Investment Management has launched the MFS Meridian Funds – Contrarian Capital Fund. It is available as a complementary offering to the existing MFS Meridian – Contrarian Value Fund. This strategy was placed on MFS’ restricted strategy list in 2023 due to capacity constraints coupled with strong demand from clients, according to a statement by the firm.
The fund is an actively managed global equity strategy that seeks to limit the downside by employing a bottom-up fundamental approach that looks for areas of “controversy” in the market to identify asymmetric investment opportunities.
The manager defines controversy as 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, according to the statement.
With an investment objective of long-term capital appreciation, the strategy aims to deliver above-average returns relative to the MSCI World Value index over a full market cycle. It is a concentrated portfolio, with generally between 30 and 60 securities.
Security selection is driven by global, bottom-up fundamental analysis and an approach unconstrained by the benchmark. Each security is screened for value and also for transformations. The fund looks for opportunities regardless of sector, geography, country or market capitalisation; sector and region positioning are a result of individual stock-picking.
The fund is managed by co–portfolio managers Anne-Christine Farstad and Zahid Kassam, who are responsible for the portfolio construction process, position sizing, all buy and sell decisions and risk assessment.
As institutional portfolio manager, Benjamin Tingling participates in the research process, strategy and portfolio construction discussions, assesses portfolio risk and customizes segregated portfolios to help meet client objectives.
Commenting on the launch, Matt Weisser, managing director – 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”.
MFS Meridian Funds – Contrarian Capital Fund is domiciled and regulated in Luxembourg, structured as a SICAV S.A. and registered in 14 countries across Europe.
