In its first half FY2024–25 results, the asset manager said it wrapped up 2024 with $38.6 billion in assets under management. Its statutory net profit after tax stood at $94 million, down 10 per cent from $104.1 million in the first half of FY23–24.
Despite several years of efforts to turn things around following the departure of Hamish Douglass and other key stakeholders in the period since 2022, the firm’s chair, Andrew Formica, said a new executive leadership structure and a clear focus on strategic priorities allow Magellan to navigate towards calmer waters.
“We are confident in our continued ability to rebuild and grow. With a new executive leadership structure in place and a clear focus on our strategic priorities, we are well-positioned to capitalise on opportunities and deliver sustainable growth,” Formica said.
Alongside announcing its financial results and a dividend of 26.4 cents, franked at 85 per cent, Magellan confirmed on Thursday that Sophia Rahmani will officially assume the role of chief executive.
The firm had previously announced its intention to appoint Rahmani as chief executive within 12 months of her commencement at the firm.
“I am delighted to confirm Sophia as our new CEO. Her outstanding leadership and strategic insight have already made a significant contribution since she joined us in May 2024. Sophia has continued to restore stability and build trust with our clients and our team and was instrumental in establishing our strategic partnership with Vinva,” Formica said.
“As I transition executive leadership to Sophia, the board remains confident that we have the right elements in place to continue to strengthen and grow. Together with the other recently announced executive appointments, we have a leadership team of exceptional quality, and I look forward to working with Sophia and her team in our next phase of growth.”
The other executive appointments include the appointment of Dean McGuire as chief financial officer from 3 March, to replace Kristen Morton whose resignation was announced on 13 November.
Michelle Mutchnik, who served as interim chief financial officer from 24 January, will transition to deputy CFO, Magellan said.
Stack’s departure hasn’t dented confidence, yet
Late in January, Magellan announced the departure of Gerald Stack, the lead portfolio manager on the firm’s four infrastructure funds and the head of investments, after 18 years with the business.
In a report published just days later, Morningstar said Stack’s departure would likely spark another period of heavy redemptions at the embattled asset manager.
Acknowledging that Stack does not have the same public presence as co-founder Douglass, Morningstar said his exit could still prompt redemptions as around 75 per cent of the infrastructure funds under management (FUM) are held by institutional clients.
Shaun Ler, equity analyst at Morningstar, said: “We assume roughly $8 billion of one-off redemptions from the infrastructure strategy – around 50 per cent of infrastructure FUM and 22 per cent of group FUM – throughout fiscal year 2025–26.
“It will take time for clients and consultants to regain conviction in Magellan’s investment capabilities amid recent changes to its investment team.”
However, Rahmani told shareholders on Thursday that “thus far”, clients have supported Stack’s transition out of the business and confirmed that Ben McVicar and Ofer Karliner would be taking over as co-heads of infrastructure.
“As of today, we’ve not seen any downgrades in our existing ratings from consultants and no institutional clients have announced their intention to redeem on the back of this news,” Rahmani said.
She, however, conceded that the risks associated with client retention in listed infrastructure remains “heightened”.
Looking to the future, the new CEO identified four key industry trends reshaping the investment management landscape that could benefit Magellan.
These include a fundamental transformation from a product-centric to a service-oriented industry, industry consolidation, alongside structural shift towards alternatives and private markets.
Elaborating on the growing popularity of alternatives, she said: “This evolution is fundamentally changing both the opportunity landscape and client expectations.
“While these structural changes have created headwinds for traditional managers, they’ve also opened doors for forward-thinking firms to stand out. At MFG, we’ve carefully considered these dynamics and how to position our business accordingly.”
Magellan’s share price closed Thursday down by more than 10 percent.
