Magellan suffers another large funds outflow

The once high-flying global funds manager reported a net outflow in funds under management of 35 per cent, or $21bn, in the last year.

Magellan Financial Group has suffered another large outflow of funds under management, taking its total net reduction to $21.6bn over the past year.

The once high-flying global funds manager reported a net outflow of $2.1bn in its funds under management in June, including $1.7bn of institutional and $0.4bn of retail money.

Magellan’s total funds under management dived to $39.7bn from $41.4bn in the final month of the 2023 financial year, a hefty drop of just over 5 per cent.

Magellan shares fell 5.8 per cent to $9.17 after the latest FUM update on Thursday.

The group has seen its funds under management fall 35.2 per cent since June 2022, when they sat at $61.3bn.

Shareholders have been stung by the loss of fee income associated with a relentless outflow of funds under management at Magellan since early 2020 when its investment performance began to suffer.

That loss of FUM snowballed in late 2021 when then CEO Brett Cairns resigned and a major investment mandate from St James Place was lost.

That preceded the departure of Magellan co-founder and former Chief Investment Officer and Chairman, Hamish Douglass in early 2022.

Industry fund giant Hostplus was the latest customer to pull a mandate from under-pressure equities manager Airlie, owned by Magellan Financial Group, in April this year.

From a peak of $104.31bn in January 2020, Magellan’s FUM has collapsed by 61 per cent.

Magellan’s share price fell as much as 90 per cent in that time.

In the past financial year alone, Magellan’s FUM fell 35 per cent and its shares fell 27 per cent.

On Thursday, the share price closed down 8.3 per cent at $8.92.

Magellan will pay distributions net of reinvestment of about $0.3bn in July, which will be reflected in its July FUM update. It estimates its performance fees will be $11m for the year.