Magellan kicks off 2025 with FUM rise
As the firm announces a raft of executive changes, funds under management (FUM) at Magellan rose slightly during January.
During the month, it said FUM rose 1.2 per cent from $38.6 billion to $39.1 billion, regaining its losses in December when it experienced outflows of $0.4 billion.
The fund manager said retail and institutional flows were flat during the month, with retail FUM largely unchanged and institutional FUM rising 2.6 per cent from $22.5 billion to $23.1 billion.
Global equities and infrastructure equities were flat at $14.5 billion and $16.7 billion, respectively, while Australian equities rose by 5.3 per cent from $7.5 billion to $7.9 billion.
While infrastructure equities were flat during January, research firm Morningstar forecast the division could lose up to $8 billion in institutional infrastructure mandates following the exit of its division head Gerald Stack.
It was announced at the end of January that Stack, who is also Magellan’s head of investment, would be departing the firm after 18 years in July, and Magellan is yet to announce a formal replacement for the role. The latest departure of a longstanding executive follows the two major departures of chief executive Brett Cairns at the end of 2021 and chief investment officer Hamish Douglass in 2022 which caused significant outflows.
Shaun Ler, equity analyst at Morningstar, said: “We assume roughly $8 billion of one-off redemptions from the Infrastructure strategy – around 50 per cent of infrastructure FUM and 22 per cent of group FUM – throughout fiscal year 2025–26.
“This assumption aligns with historical precedent, when the CEO and CIO departures in late 2021 and early 2022 led to massive redemptions. This resulted in a loss of over half of Magellan’s global equities FUM between November 2021 and March 2022.
“It will take time for clients and consultants to regain conviction in Magellan’s investment capabilities amid recent changes to its investment team. Accordingly, we see limited prospects for maintainable net inflows over the medium term.”
As well as the exit of Stack, Magellan announced multiple new appointments, including Emma Pringle as head of investor relations and sustainability from Maple-Brown Abbott; former chief executive for Australia and New Zealand at AllianceBernstein, Jen Driscoll, as chief operating officer; and Sam Mosse as chief risk officer.
Andrew Gowen joined the portfolio management team as an associate portfolio manager on its High Conviction Fund, working alongside Nikki Thomas.
AUTHOR
Laura Dew
Recommended for you
Commentators have said Australian fund managers are lacking in-depth knowledge compared with overseas peers when it comes to expanding their range with ETFs and underestimating the competition from passive strategies.
VanEck is to list two ETFs on the ASX next week, one investing in residential mortgage-backed securities and the other in Indian companies.
Perpetual outflows have risen by 134 per cent from the previous quarter as the result of client mergers and rebalancing including $2.5 billion in outflows at Pendal Asset Management.
ClearBridge Investments has expanded investor access to its global infrastructure investment strategies through the launch of three active ETFs on the ASX.
