The ASX-listed Magellan has rearranged top investment and distribution roles and appointed a funds veteran as chair in a bid to draw a line under its recent troubles.
Along with annual results released last week, Magellan announced CEO David George would relinquish his dual chief investment officer duties in favour of deputy, Gerald Stack.
Stack has been named head of investments following the revamp while Andrew Formica assumes the Magellan group chair spot.
Formica, who joined the Magellan board only last week, has a stellar funds management back-story as chief of the UK-headquartered Jupiter Asset Management, co-head of Janus Henderson and, prior to the merger with Henderson in 2017, top dog at Janus Capital.
Former chair of Australian investment firms Pendal and Investa, Deborah Page, is also pencilled-in to join the Magellan board in October as a non-executive director.
Meanwhile, Mark Burgess has stepped in to replace long-time head of distribution and marketing, Frank Casarotti, who flagged his retirement at the end of 2023 last year.
In a letter to shareholders, George says Casarotti would officially finish up on December 31 “after a remarkable 40 year career, 16 of which were at Magellan building and leading one of the most successful distribution and client service organisations in Australia”.
“Frank will remain with us as Senior Adviser until the end of the calendar year,” he says, “to ensure a smooth transition”.
However, Burgess – a 10-year Magellan employee – takes the reins with Magellan well down from the Casarotti heyday when funds under management peaked above A$116 billion late in 2021.
After losing a key UK mandate in December 2021 and weathering a leadership storm centred around co-founder and ex CIO, Hamish Douglass, early last year, both institutional and retail investors abandoned the manager en masse – including in the NZ market where Magellan had been an adviser favourite for many years.
The latest annual accounts show net outflows slowed to A$10.2 billion over the six months to June 30, down from A$15 billion in the previous half-year period.
As at the end of June, Magellan reported almost A$39.7 billion under management compared to A$113 billion at the same date in 2021 and an almost even retail-institutional split.
According to the results, retail investors account for almost A$18.4 billion of the group’s assets under management while institutional money fell to about A$21.3 billion: the respective June 2021 figures landed at roughly A$31 billion and A$83 billion.
The massive fall in assets under management – now almost a third of the high point – saw Magellan net profit after tax more than half year-on-year to A$174.3 million (A$401 million for the 2022 annual period). During the year, Magellan also booked performance fees of more than A$11 million, up from zero in 2021/22 period.
Nonetheless, the still-large fund manager has no debt and net assets of more than A$945 million including almost A$374 million in cash – with some of the surplus possibly earmarked for buyouts of alternative asset managers.
“We are proactively looking at opportunities for growth in areas where there are increasing allocations in client portfolios such as alternatives and private markets,” George says in the letter. “… Importantly, our approach to inorganic growth is disciplined.”
Magellan declared a dividend of A35.6 cents per share for the six months to June 30 with a special ‘performance fee’ top-up of A4.2 cents per share.
Investors marked up Magellan shares more than 15 per cent on the news to close the week at A$10.60