The bad news for Magellan continues with Lonsec announcing on Wednesday it had placed eight Magellan global equities funds on “fund watch” following the announcement that Hamish Douglass was taking an indefinite medical leave of absence.
The funds in question include classes of both the Magellan Global Fund and the Magellan High Conviction Fund.
“Lonsec notes that co-founder Chris Mackay has returned to Magellan to oversee the portfolio management of the Manager’s Global Equity strategies and institutional mandates, and Nikki Thomas has rejoined as co-portfolio manager of the Global Equity strategies.
“Lonsec has met with Magellan to discuss these developments and is seeking further clarification of the longer-term impact on the manager’s investment team and process. Lonsec is currently undertaking its annual Global Equities Sector Review and will seek to have the rating resolved as soon as practicable,” Lonsec said in a note to investors.
According to Lonsec, the fund watch rating indicates that no new investment into this financial product is recommended following a significant change which calls for a "detailed assessment" and/or a series of rectifying actions.
It differs from a redeem rating, which indicates the financial product is no longer considered worthy of investment for any time period.
On Tuesday, Morningstar put Magellan’s global and high conviction funds under review following the unexpected announcement from Douglass.
The announcement that Hamish Douglass would be taking a leave of absence from his roles as chairman and chief investment officer came on Monday. In a statement issued by Magellan, the fund manager confirmed that after a period of intense pressure and focus on both his professional and personal life, Douglass would be stepping down for an indefinite period of time.
The fund manager has had a tumultuous few months, culminating with the announcement in December that UK wealth firm St James’s Place had pulled a $19 billion mandate.
Days earlier, Magellan was rocked by the abrupt resignation of its chief executive Brett Cairns for personal reasons, an event that at the time topped off an earlier triggered downward spiral of its share price.
Maja Garaca Djurdjevic
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.
