INTERVIEW-U.S. asset manager MFS picks Luxembourg as post-Brexit EU hub

* Firm to seek regulatory approval for EU subsidiary

* Currently has 7 staff in Luxembourg office

* No firm decision on staff roles, number to move

By Simon Jessop and Carolyn Cohn

LONDON, May 9 (Reuters) - U.S. asset manager MFS InvestmentManagement said it will seek permission to create a EuropeanUnion hub in Luxembourg as it positions itself for Britain'sexit from the bloc.

MFS, which is owned by Canadian insurer Sun Life Financialand traces its roots to the launch of the first U.S.investment trust in 1924, has yet to make a final decision onthe scale of any move, Madeline Forrester, managing director, UKInstitutional Business, told Reuters.

The plan, which requires approval from Luxembourgregulators, would see MFS build up its existing Luxembourgoffice, currently staffed by 7 people, through internal companymoves or local hires.

MFS has taken no decision yet on the type of roles to moveto Luxembourg or how many.

The company employs 1,900 staff globally, of which around140 are in Britain, and runs a number of actively managed fundsfor retail and institutional clients. It said London wouldremain MFS's main office in Europe after Brexit.

At present, MFS has a Luxembourg fund range with 36 equity,multi-asset and fixed-income sub-funds that are sold primarilyinto Europe, Britain and Latin America.

Britain's vast financial services looks set to be one of themost divisive areas in the Brexit negotiations, with Britaindemanding a generous deal while the EU refuses to shift from itsinsistence that Britain's red lines -- such as ending the freemovement of workers from the EU -- make that impossible.

While a transitional deal between Britain and the EU couldcreate more time for asset managers to determine final plans,most say they are already beginning to take permanent action toopen or bulk up operations elsewhere.

"We have to plan for next March [when Britain is set toofficially leave the bloc]. That means preparing for the worst,that's the frustrating bit, and we're not the only industry thatfeels this way, I'm sure," Forrester said.

"We're all investing time and money planning for the mostunfavourable outcome. We view this as making a long-terminvestment in our Luxembourg office, but whatever the result ofthe final deal, we have to look after our clients and that meanspreparing for a 'hard' Brexit."

Luxembourg has been among the chief beneficiaries from theuncertainty caused by Brexit, with a number of insurers andasset managers choosing it for their EU base, includingBlackstone and Carlyle.

MFS staff roles and numbers in Luxembourg will in large partdepend on the Luxembourg regulator and how many employees withinvestment or risk management responsibility it requires to bebased there - a sensitive subject that has already seen thecountry pitched against rivals such as Dublin.(Editing by Sinead Cruise and Adrian Croft)