How Magellan plans to regain advisers’ favour
Magellan chief executive, David George, has sent a message to advisers that they are a key client base for the firm and that it is working on improving fund performance.
Speaking on a webinar regarding its full-year results, George was asked a question regarding the negative sentiment from advisers towards the firm and how it plans to turn this around.
Many had turned against the firm after the departure of founder and former chief investment officer, Hamish Douglass, and the underperformance of its flagship Magellan Global Fund. Douglass is now a consultant for the firm.
George said: “Adviser support is crucial to our plans, investment advisers are a key client base for us. There’s no question of that importance and our focus is on making their jobs work as well as possible.
“Without commenting on Hamish, success in asset management has always come from a team, and we have a very big team and are executing on a stable and reliable investment philosophy.
“We know there has been some change in our organisation, and we know our performance wasn’t where we wanted it to be or where our advisers wanted it to be, and we are working on it.”
Meanwhile, George and the newly appointed chair, Andrew Formica, discussed how the firm will grow from inorganic growth and M&A opportunities. Formica joined the board of Magellan Financial Group last month initially as a non-executive director and he has now been appointed as a non-executive chair replacing Hamish McLennan.
The firm is targeting to achieve $100 billion in assets under management through rebuilding its track record, organic growth and inorganic growth.
Asked where this inorganic growth could come from, George said: “There is a platform here that can support equity strategies but also has capacity to support other strategies as well. When we look at where our clients’ portfolios have needs or where they are underweight, we need to look to meet those needs and that’s an opportunity for us.
“We need to ensure there is cultural and commercial alignment, and that it makes sense and fits the profile of being something our clients are looking for.”
Formica added: “M&A is one of the tools available to us as part of our growth strategy. M&A can be successful and that tends to be when there is strong cultural alignment and a strong strategic intent.
“We have a fantastic environment for talented investment professionals, strong client relationships and a strong governance and operating model to support that. So businesses where they are looking to benefit from global reach and the approach we have, have a talented investment team that want to remain autonomous, could be an ideal match.”
In his prior role, Formica led the merger between Henderson Group and US firm, Janus Capital, to form the Janus Henderson Group.
AUTHOR
Laura Dew
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