Performance fees at Magellan Financial Group have fallen from $81 million to $30 million in the 2020/21 financial year after the firm experienced underperformance.
In an announcement to the Australian Securities Exchange, the firm said for the year ended 30 June, 2021, estimated performance fees were $30 million. This included $12.4 million announced in the firm’s interim report at the end of 2020.
This compared to estimated performance fees of $81 million earnt during the 2019/20 financial year and $83 million during 2018/19.
The flagship Magellan Global fund was entitled to performance fees of 10% of the excess return over the MSCI World index benchmark and absolute return hurdle, which was the yield of the 10-year Australian Government Bond.
However, it had underperformed its sector peers with returns of 10.8% over one year to 30 June versus returns by the global sector of 28.3%, within the Australian Core Strategies universe. The MSCI World index also returned 28.2% over the same period.
Performance of Magellan Global versus sector and benchmark over one year to 30 June 2021
The Airlie Australian Share fund was the only Magellan fund which had beaten its sector over one year to 30 June, 2021 with returns of 33.6% compared to Australian equity sector returns of 28.5% within the Australian Core Strategies universe, according to FE Analytics.
In the infrastructure space, Magellan Infrastructure returned 7.1% compared to returns by the infrastructure sector of 10.4%.
Meanwhile, average funds under management increased from $95.5 billion to $103.7 billion over the same period and its funds would pay distributions (net of reinvestment) of $438 million in July.
