Reuters- MFS Investment Management said on Monday it has set up a subsidiary to provide seed capital to hedge funds, in another instance of a mainstream money manager venturing into the alternativeinvestments area.
MFS, a unit of Canadian insurer Sun Life Financial Inc , said in a statement that the new subsidiary, Four Pillars Capital Inc, will be run as a separate entity, with MFS providing operations and marketing support to the firm.
The new firm has hired Thomas Knott as its president and Eric Lass as its chief investment officer, MFS said. Knott was a co-founder of hedge fund K Capital Partners while Lass was managing K Capital’s Credit Opportunities Fund, it said.
“Our institutional clients are increasingly demanding alternative investments to complement long-only strategies and diversify their portfolios,” MFS President and Chief Executive Officer Robert Manning said in the statement.
The move by MFS, which created America’s first mutual fund in 1924, comes after similar steps taken by some rivals.
BlackRock Inc said in June it will pay $1.7 billion to buy the fund-of-funds business from Quellos Group LLC.
