Magellan statutory NPAT declines 67% in H1
Statutory net profit after tax at Magellan has declined 67% while funds under management have more than halved.
Announcing its results for the first half of FY23, covering the six months to 31 December, the firm said average funds under management had declined from $112.7 billion a year ago to $53.8 billion.
This had led to profit before tax and performance fees of Magellan’s fund management business declining from $293 million to $119 million over the same period.
Management fee revenue for the six months was down 49%, broadly in line with average FUM decline.
Performance fees, which were earlier described as “not meaningful”, were $0.1 million compared to $11.5 million at the end of 2021.
Statutory net profit after tax had declined 67% from $251.6 million at the end of the first half of FY22 to $83.8 million.
Magellan said the downturn reflected accelerated changes to the business in 2022, reduction in funds under management and challenging market conditions creating headwinds for equity allocations.
Chief executive, David George, said: “Meaningful transformation takes time. Whilst it is still early days, I can report that we are making good progress in delivering on our FY23 strategic priorities and are encouraged by the improving trends that are emerging.
“In the last six months we have launched new strategies, refined our plan around staff retention and enhanced our investment process to improve how we collaborate and generate ideas. These are key first steps in delivering on our five-year target of $100 billion in funds under management by 2027.”
This turnaround strategy included stabilising core fund management performance, launching new products, adding new capabilities through inorganic opportunities, disciplined capital and cost management and aligning employee value proposition to clients.
AUTHOR
Laura Dew
Recommended for you
Some 42 per cent of CEOs say they are actively reinventing their business to stay relevant in the next decade, with consumer services the most common choice for asset and wealth managers.
Former Ophir Asset Management chief executive, George Chirakis, has joined private equity manager Scarcity Partners, while the asset manager has appointed a replacement from Macquarie.
Australian Unity has appointed a fund manager for its Healthcare Property Trust, joining from Centuria Healthcare, as it restructures the product with a series of senior appointments.
Financial advisers nervous about the liquidity of private markets funds for their retail clients are the target of fund managers launching semi-liquid products which offer greater flexibility and redemptions.
