Magellan grows infrastructure FUM despite manager exit
Magellan Financial Group reported outflows of $0.5 billion in February, according to its latest funds under management (FUM) update.
In an ASX update, the firm said it saw institutional outflows of $0.3 billion and retail ones of $0.2 billion for the month.
This brought total FUM down by 1.2 per cent from $39.1 billion in January to $38.6 billion. Over the past year, FUM has increased by 3.7 per cent from $37.2 billion in February 2024.
Looking at specific asset classes, global equities and Australian equities both decreased, while infrastructure equities increased slightly.
Global equities fell from $14.5 billion to $14.2 billion, while Australian equities fell from $7.9 billion to $7.6 billion. However, infrastructure equities rose from $16.7 billion to $16.8 billion after being flat in the previous month.
During the month, the firm announced portfolio manager Nikki Thomas would be moving away from the flagship Magellan Global Fund to focus on its High Conviction Fund, leaving the Global Fund to be run by Arvid Streimann and Alan Pullen as co-portfolio managers.
The small rise in infrastructure assets will be welcome news after concerns of possible severe outflows following the announcement of the departure of infrastructure head Gerald Stack, who will leave in July after 18 years. He is currently the head of investments and has led the firm’s global listed infrastructure team, including its $1.5 billion Magellan Infrastructure Fund.
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. Accordingly, we see limited prospects for maintainable net inflows over the medium term.”
Sector head Ben McVicar has been appointed to lead the infrastructure team, but no replacement has yet been named for the broader head of investment responsibilities. It also stated Stack had enacted a clear succession plan and that clients were aware and supportive of this.
Chief executive Sophia Rahmani said: “Gerald has done the best he can to put together a textbook succession plan, and the reaction we’ve seen from clients and institutional consultants has supported that. We have always had five infrastructure managers so our clients know them. To our clients, Gerald’s departure wasn’t a huge shock to them, and they are happy to see Ben elevated to lead that team.
“No client has indicated an immediate loss of assets under management, but we do recognise the risk of listed infrastructure as an asset class. I would say the client and consultant reaction we saw was what we expected in terms of it being a long-term transition.”
AUTHOR
Laura Dew
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