‘Textbook succession plan’ stems Magellan infrastructure outflows
According to Magellan Financial Group, departing head of investment, Gerald Stack, has enacted a “textbook succession plan” which has helped reduce forecasted outflows from his infrastructure division.
It was announced earlier this year that Stack would be departing in July after 18 years with the business. He is currently the head of investments and has led the firm’s global listed infrastructure team, including its $1.5 billion Magellan Infrastructure Fund.
Following the departure, Morningstar analysis forecast that the firm could lose as much as $8 billion given the institutional nature of infrastructure assets where flows are typically less sticky than retail ones.
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. 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.”
Responding to this on a webinar following the firm’s half-year results, chief executive Sophia Rahmani said the firm and Stack had aimed to mitigate these by enacting a strong succession plan. As well as Stack, the infrastructure team consists of sector head Ben McVicar and portfolio managers Ofer Karliner and Jowell Amores.
“Gerald has done the best he can to put together a textbook succession plan, and the reaction we’ve seen from clients and institutional consultants has supported that. We have always had five infrastructure managers so our clients know them. To our clients, Gerald’s departure wasn’t a huge shock to them, and they are happy to see Ben elevated to lead that team.
“No client has indicated an immediate loss of assets under management, but we do recognise the risk of listed infrastructure as an asset class. I would say the client and consultant reaction we saw was what we expected in terms of it being a long-term transition.”
While McVicar has been appointed to lead the infrastructure team, Magellan said it is yet to appoint a replacement for his head of investment responsibilities.
“With Gerald’s departure in July, we are thinking about the head of investment role and that could be the next, and hopefully final, appointment to the executive team for now,” Rahmani said. “Now it’s about embedding the team and capitalising on the opportunities we have.”
The appointment of a head of investment would follow the executive appointments of Emma Pringle as head of investor relations and sustainability, chief operating officer Jen Driscoll, chief risk officer Sam Mosse and Simon Barrett as head of UK and EMEA distribution.
AUTHOR
Laura Dew
Recommended for you
With an ESG product labelling consultation currently ongoing, Zenith’s head of responsible investment agrees the existing system for funds is so unclear that people may be better off ignoring it.
The global investment market is looking to China as a roadmap to success, as the nation pioneers technological development in AI and robotics, Australia-China Relations Institute Professor Marina Yue Zhang has said.
International asset manager Robeco has appointed a new chief investment officer as incumbent Mark van der Kroft departs the firm after 25 years.
Regal Partners has regained the funds under management lost after the Opthea failure to close out the financial year at $18.9 billion.
