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Magellan returns to FUM growth

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3 minute read

The fund manager is back in recovery mode after a brief halt in April.

Troubled fund manager Magellan Financial Group has reported a blip in funds under management (FUM) following a month of losses, which was preceded by five consecutive monthly increases.

In an ASX statement, Magellan reported it had $36.7 billion in FUM as at 31 May, up from $36.3 billion at the end of April.

During May, Magellan’s retail FUM remained flat at $17.1 billion while its institutional FUM edged up to $19.6 billion from $19.2 billion.

The fund manager also confirmed net outflows of $0.1 billion, which included net retail outflows of $0.2 billion and net institutional inflows of $0.1 billion.

Global equities FUM decreased from $15.6 billion to $15.5 billion. Meanwhile, infrastructure equities FUM ticked up from $15.4 billion to $15.8 billion while Australian equities FUM gained slightly from $5.3 billion to $5.4 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.

The fund manager has had a period of steady FUM increases, which was briefly halted in April. Namely, since November, Magellan’s FUM has increased from $35.2 billion to the current $36.7 billion.

In February, the firm announced several changes, including the appointment of Sophia Rahmani to the role of managing director of Magellan’s main operating subsidiary, Magellan Asset Management Limited, effective in May 2024.

Magellan’s executive chairman, Andrew Formica, said he will remain as the executive chair for an interim period to ensure the firm maintains continuity and stability, focusing his attention on Magellan’s strategic development, while Rahmani focuses on the firm’s funds management business.

“With a new executive leadership structure in place and a number of legacy issues behind us, including having addressed the Employee Share Purchase Plan loans and the uncertainty around our Magellan Global Fund (Closed Class) (MGF), I am confident the business is in a strong position to rebuild and grow,” Formica said.

In parallel with these “important” steps, Formica said Magellan has made progress on its strategic agenda, which includes a refocused US distribution platform and plans to launch a new product – the Magellan Unconstrained Fund – to retail investors.

Admitting that “more needs to be done” to restore Magellan’s former glory, Formica said the firm remains a “highly profitable business, with robust operating cash flows and significant financial strength in the form of our strong balance sheet”.

“I am encouraged by the progress we are making and am confident our strong foundations position us well to deliver positive outcomes for our clients and shareholders.”

Maja Garaca Djurdjevic

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.