Under-fire ASX-listed fund manager, Magellan, reported a big bump in net outflows in March with the group’s Australian equities subsidiary, Airlie, taking the hit this time around.
Airlie saw funds under management (FUM) fall A$3 billion month-on-month to close at A$6 billion as two big Australian institutions pulled mandates following the exit of founder and star stockpicker, John Sevior, early in March.
Sevior established Airlie in 2012 after a stellar 17-year career at marquee Australian funds management firm, Perpetual. He retired last month with former Perpetual colleague, Matt Williams, taking the reins at Airlie. Williams joined Airlie in 2016 just two years before Magellan acquired the boutique.
David George, Magellan chief, brushed off the Airlie exits in an internal staff note published in the Sydney Morning Herald.
George said in the email: “Ultimately, the transition put a decision point in front of a group of clients, and while some have stayed, others have moved on. We must respect that clients can change their investment approaches and remain focused on executing for the vast pool of investors who remain with us.”
“…The conclusion of these mandates is part of the journey for Airlie from having a concentrated institutional client base to one which, over time, will have a greater and healthy balance of retail and institutional FUM.”
Overall, Magellan recorded net outflows of A$3.9 billion in March comprising A$3.4 billion of institutional money and the remainder from retail clients while investment returns took the edge off somewhat as total FUM fell only A$2.2 billion during the period.
Outflows from the Sydney-based manager’s global equities flagship funds had eased in recent months in the wake of massive withdrawals starting with the closure of a A$23 billion mandate by UK financial advisory firm, St James Place, in December 2021.
Magellan chief executive, Brett Cairns, quit just prior to the St James news with co-founder and chief investment officer, Hamish Douglass, following a few months later.
The manager named former Future Fund deputy chief investment officer, George, as chief last May to steady the ship.
As at the end of March, Magellan managed about A$43.2 billion – or about a third of the December 2021 FUM peak of A$116 billion.
Magellan shares closed just under A$8 last Thursday at the lowest point in a decade.