Troubled fund manager Magellan Financial Group has reported its second monthly increase in funds under management (FUM) since January 2023.
In an ASX statement, Magellan reported that it had $35.8 billion in FUM as at 31 December, up from $35.2 million at the end of November.
During December, Magellan’s retail FUM remained unchanged at $16.7 billion, while its institutional FUM rose from $18.5 billion to $19.1 billion.
But the fund manager also confirmed that outflows persisted over the month. Namely, in December, Magellan experienced net outflows of $0.2 billion, which included net retail outflows of $0.3 billion and net institutional inflows of $0.1 billion.
Global equities FUM decreased from $15.0 billion to $14.9 billion. Meanwhile, infrastructure equities FUM increased from $15.5 billion to $15.8 billion, and Australian equities FUM lifted from $4.7 billion to $5.1 billion.
Magellan also noted that its funds will pay distributions (net of reinvestment) of approximately $0.3 billion in January, which will be reflected in the FUM figures in next month’s announcement.
Moreover, the fund manager explained that performance fees for the six months ended 31 December 2023 are immaterial.
“Performance fees (if any) may fluctuate significantly from period to period.”
Average FUM for the six months ended 31 December 2023 was $36.9 billion compared to $53.8 billion for the six months ended 31 December 2022.
But Mr Formica, who took on the executive chairman role following the departure of chief executive David George in October, conceded that it will be “a long path back to recovery”.
In an address to shareholders, he acknowledged that Magellan’s FUM represents a “substantial decrease” compared to the heights of recent years.
“However, Magellan remains significant within the global landscape of fund managers, and I believe has the foundations upon which to rebuild,” Mr Formica said.
“I know this is a cause of concern for you, our shareholders, and I want you to know I am focused on it. Over the last three months, I have made it a priority to meet with clients and advisors, both existing and those that have left, to understand what can be done to improve the situation.”
Mr Formica noted that the broad strategy outlined at last year’s AGM remains unchanged, but the $100 billion FUM target previously set by Mr George has been all but abandoned.
“Whilst not necessarily targeting $100 billion in assets under management – AUM really is an outcome of delivering for our clients rather than a strategic goal – the underlying premise of the strategy remains,” he said.
“That is, to leverage our strong existing platform across investments, distribution, and operations to diversify the business and increase the strong investment talent we have in the business, enabling us to deliver on our commitment to grow the wealth of our clients.
“Importantly, we are positioning Magellan for the next phase of its evolution – from a founder-led business into a more diversified global fund manager of scale that delivers exceptional investment performance for our clients.”
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.
