Magellan reports 1H25 results amid appointment shuffle

Magellan Financial Group has reported its first half FY25 results while appointing a new chief financial officer and promoting Sophia Rahmani to chief executive. 

In its results for the six-month period to 31 December, it said statutory net profit after tax was $94 million, down 10 per cent from $104.1 million in the first half of FY24.

Assets under management were $38.6 billion which the firm attributed to investment performance and favourable market movement rather than new fund flows. Some 58 per cent of this is institutional and 42 per cent is retail. 

This consists of $14.5 billion in global equities, $16.6 billion in infrastructure equities and $7.5 billion in Australian equities.

Revenue was $129,828, down slightly from $131,243 at the end of 2023, which mostly came from management fees of $121,048.

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Performance fees before tax were $6.1 million, up substantially from $0.1 million a year ago. These were driven by the group’s global equities strategies which exhibited strong absolute investment performance in the six-month period.

Andrew Formica, executive chair, said: “We are confident in our continued ability to rebuild and grow. With a new executive leadership structure in place and a clear focus on our strategic priorities, we are well-positioned to capitalise on opportunities and deliver sustainable growth.”

Separately, the firm appointed Dean McGuire as chief financial officer from 3 March to replace Kristen Morton. He joins from 13 years at property management company GPT Group where he was the interim CFO and previously worked at NAB.

Michelle Mutchnik, who has served as interim CFO since the start of the year, will transition to deputy CFO. 

The firm also confirmed Sophia Rahmani, who joined the firm last May as managing director, has been formally appointed to chief executive. 

The board had previously announced the establishment of a transitional leadership arrangement and the intention to appoint Rahmani as chief executive within 12 months of her commencement date. Her new appointment represents the conclusion of this transitional leadership arrangement, Magellan stated.

“I am delighted to confirm Sophia as our new CEO. Her outstanding leadership and strategic insight have already made a significant contribution since she joined us in May 2024. Sophia has continued to restore stability and build trust with our clients and our team, and was instrumental in establishing our strategic partnership with Vinva,” said Formica.

“As I transition executive leadership to Sophia, the board remains confident that we have the right elements in place to continue to strengthen and grow. Together with the other recently announced executive appointments, we have a leadership team of exceptional quality, and I look forward to working with Sophia and her team in our next phase of growth.”

Speaking at its results briefing, Rahmani identified four key industry trends reshaping the investment management landscape that could benefit Magellan. These were:

1. Fundamental transformation from a product-centric to a service oriented industry.
2. Industry consolidation as investment managers pursue scale and efficiencies.
3. Wholesale and retail active-to-passive flows abating.
4. Structural shift towards alternatives and private markets.

Elaborating on the final point, she said: “This evolution is fundamentally changing both the opportunity landscape and client expectations. While these structural changes have created headwinds for traditional managers, they’ve also opened doors for forward-thinking firms to stand out. At MFG, we’ve carefully considered these dynamics and how to position our business accordingly.”