Jenkins staff win as MFS buys in

The management’s ownership share of boutique equities manager Jenkins Investment Management has been lifted from 18 per cent to 40 per cent following the purchase of a controlling shareholding by MFS Group.

MFS has acquired 60 per cent of the Sydney-based manager from co-founder Paul Jenkins, a private equity fund and a few other small external shareholders. The other co-founder, managing director David Aylward, said MFS was selected as a cornerstone shareholder because it was a successful boutique financial services firm which could provide the patient capital for management to plan the company’s future. MFS, which is best known as a property investor, has recently expanded its hedge fund interests, which include a substantial holding in HFA and two other hedge fund operators. The Jenkins stake is its first foray into traditional equities investment management. Jenkins has about $900 million under management. Its three main funds are a small-cap fund, an Australian equity broad market fund and a long/short fund. The firm was started by Jenkins, a former general manager of investments of Suncorp Investment Management, and Aylward in 1998. It expanded its capabilities from late 2004 when Sean Fenton joined from AMP Capital Investors as portfolio manager and subsequently launched the long/short fund. Aylward is portfolio manager for the small-cap fund and Fenton portfolio manager for broad markets as well as the long/short fund. Aylward said that MFS could help Jenkins grow the business, particularly in the retail space where MFS has an extensive client base. Jenkins has concentrated on the institutional marketplace to date. Aylward said that the firm was careful to put in place an ownership structure which aligned the interests of shareholders, management and clients. “The structure is both robust and flexible. We wanted the right share of the pie for management but also some support (of a larger shareholder) … MFS ticked a lot of boxes for us,” he said.