Troubled fund manager Magellan Financial Group has reported its third monthly increase in funds under management (FUM) since January 2023.
In an ASX statement, Magellan reported that it had $36.3 billion in FUM as at 31 January, up from $35.8 billion at the end of December.
During January, Magellan’s retail FUM increased from $16.7 billion to $17.0 billion, while its institutional FUM rose from $19.1 billion to $19.3 billion.
But the fund manager also confirmed that outflows persisted over the month. Namely, in January, Magellan experienced net outflows of $0.4 billion, which included net retail outflows of $0.2 billion and net institutional outflows of $0.2 billion.
Global equities FUM increased from $14.9 billion to $15.5 billion. Meanwhile, infrastructure equities FUM decreased from $15.8 billion to $15.6 billion, and Australian equities FUM lifted from $5.1 billion to $5.2 billion.
Magellan’s 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.”
