History
The company was founded in 1924 by L. Sherman Adams, Charles H. Learoyd and Ashton L. Carr. The company's oldest fund is the Massachusetts Investors Trust (MIT), a mutual fund created with $50,000 at the company's inception and reported to be "the world's first open-end investment fund" and "a business breakthrough that changed our lives in a profound way".
The company used "brokerage channels" to market its shares to the public and later expanded to $14 million in assets over the next five years. During the stock market crash of 1929 the fund survived an 83% loss and went on to create a second fund in 1934.
In 1998, MFS Chairman and Chief Executive, A. Keith Brodkin died, causing a major shift in top management. MFS's assets under management grew from $55 billion to $90 billion between 1997 and 1998, and was reported to be the fastest growing company amongst the 20-largest that funds sold through brokers.
In July 2002, MFS had its largest work force reduction, when it laid off four percent of its employees and reduced retail sales positions and duplication to improve efficiency.
In 2003 MFS and five other mutual fund companies in the Boston area were investigated by the Massachusetts and New Hampshire regulators. That same year, the Securities and Exchange Commission alleged that MFS made "false and misleading" statements in its fund prospectus about its policy on market trading and market timing.
In 2004, MFS paid $350 million to settle state and federal fraud charges and two of its top executives, John W. Ballen and Kevin R. Parke, left MFS and were barred from the industry temporarily though neither admitted to any wrongdoing. MFS appointed Robert Pozen as non-executive chairman from 2004 to 2010. MFS then implemented a set of company reforms to inform investors about fees, keep fund boards independent and create deterrents to market timing. These changes were intended to addressed the concerns of regulators and lawmakers and were praised by fund industry analysts and consumer advocates. These reforms ended the "soft-dollar" arrangements which allowed the swapping of brokerage commissions for market research and data.
In 2006, MFS' corporate parent, Sun Life Financial Inc. considered selling the company but failed to find the right deal or price.
In 2007, MFS created a hedge fund subsidiary called Four Pillars Capital, to create seed and expansion funds for the firms newly established alternative investment operations. Thomas A. Knott, was appointed president and Eric Lass became its chief investment officer.
In 2008, MFS eliminated five percent of its 1,800 person workforce, due to a 20% decline in its assets under management over the prior year. However, the company reports that its assets under management have grown by more than 66% between 2008 and 2011.
In 2011, MFS won the Lipper Fund Award for Best Overall Large Company and ranks #1 out of 46 fund companies.
Read more about this topic: MFS Investment Management
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