Content area
Full Text
Rob Manning was promoted to CEO of MFS in February 2004, with an unenviable task ahead of him. The company had been drawn into the US mutual funds scandal, and had to settle with the SEC to the tune of some US$225 million. Manning talks to Claire Milhench about how he got MFS back on track and his hopes for the future.
Rob Manning seems young to be leading as venerable an institution as MFS, but Manning's energy and alacrity in tackling the company's problems mirror the speed with which MFS responded to late trading allegations last year. MFS not only settled with the SEC relatively quickly, it hired Robert Pozen, an expert on mutual fund regulaton as chairman, and promoted Manning from the post of chief fixed income officer to replace erstwhile CEO John Ballen. The pair set to with a will to make MFS whiter than white, whilst Manning also tightened up the investment process on the equity side. The results have been encouraging - MFS recorded a net positive flow of US$728 million in Q1 2005.
"This is the first time we have gotten back into positive territory," says Manning, whose youthful looks belie the fact that he has been at MFS for 21 years. He argues that MFS's outflows were also more modest than at other scandal-hit firms, amounting to $7 billion in 2004, which mostly came in the middle of the year. This seems to be borne out by the GI 100 ranking of the world's largest third party asset managers. MFS fell from 45th to 52nd place, but still put on assets. Meanwhile, Janus fell 14 places from 39th to 53rd, losing $16.6 billion, and Putnam lost $54.8 billion.
"It was vital to get these issues out of the way," Manning says, on the rapidity with which he implemented his changes. "MFS has always been very humble, we have never gotten arrogant and people do like the brand and the culture. I think that helped us get through without too much damage."
One of the conditions he made when asked to take on the CEO role was that he retain the CIO title, allowing him to overhaul the investment process and thus improve performance. "The typical CEO has...