The spectacular loss of wealth suffered by Magellan Financial Group co-founder Hamish Douglass on his sale of a 7.1 per cent stake in the under siege fund manager for a fifth of its value just 18 months ago is also being felt by its employees.

Mr Douglass dumped the bulk of his stake to net $118 million, but share loans to staff are about $20 million underwater following the share price plunge, leaving them stranded at the company unless they have independent means to defray the losses.