The robust succession planning model MFS has today evolved from the early trustees’ approach to collaboration in decision making. They were driven by their desire to be responsible stewards, and their commitment to that shared responsibility laid the foundation for the collective expertise and mentorship intrinsic to the co-managed portfolios and succession planning now integrated across the entire firm.
When MFS’ trustees started managing Massachusetts Investors Trust (MIT) in 1924, they would gather in each other’s offices in Boston, scrutinizing and discussing securities for hours. They took their fiduciary responsibility seriously, picking investments for the portfolio as a team, each trustee having a vote, and the security that got the most support would be chosen for the portfolio.
This process started shifting in the 1960s, and there were periods through the 1980s when MIT was managed by a single individual. But the recognition that collaboration was critical to the formation of MIT and the firm itself led to a series of co-portfolio experiments in the 1990s in which MFS returned to the firm’s original, collaborative approach but adapted it to align with the growth and diversification of the firm’s modern platform.
A key catalyst for this change was Lisa Nurme, who joined the firm in 1987 as an analyst and then became portfolio manager of the MFS Equity Income Fund, now the MFS Value Fund, in 1995. In the late 1990s, Nurme was looking to take a sabbatical for three months. Because of the significant amount of time she’d be gone, she and her colleagues started considering bringing on a partner to manage the portfolio with her. But they weren’t looking to add someone for only three months. As Nurme put it, “This was a permanent partner. This was not somebody who was coming to mind the fund while I was gone and then leave.” They viewed this as an opportunity to move away from the individual manager approach back to a collaborative one.
By the time Nurme left for her sabbatical in 2002, she and her co-manager Steven Gorham had a successful process in place. Nurme remembers they were “basically in constant dialogue . . . there was a lot of collaboration,” and their different investment styles complemented each other, highlighting the intrinsic value of a co-management model: Diverse skills, thinking and methods lead to stronger investment decisions.