Magellan looks to strategic expansions as Vinva adds $1.7bn
Magellan is keen to enact further strategic expansions with income from strategic partnerships tripling to $31.1 million.
In its financial results for the year ending 30 June, Magellan said its statutory net profit after tax (NPAT) was $165 million. This was down by 31 per cent on the previous year when it stood at $238 million.
Assets under management (AUM) were $39.6 billion which Magellan attributed to growing client interest in its new products, divided between 42 per cent in retail and 58 per cent in the institutional channel.
Magellan chief executive and managing director, Sophia Rahmani, said: “We entered FY25 with a commitment to continuing to restore stability and confidence in our business. With our executive team now in place, and positive momentum across our strategy, culture, product delivery and investment capabilities, we have strong foundations in place for long-term success.”
Income from strategic partnerships tripled from $10.3 million to $31.1 million from the introduction of the deal with Vinva Investment Management, which was completed in August 2024, as well as an existing relationship with Barrenjoey Capital Partners.
Magellan acquired a 29.5 per cent stake in Vinva last year which sees it distribute Vinva’s products and investment strategies through its global distribution team as part of an exclusive distribution agreement.
Since then, four systematic equity funds have been launched. It established a global distribution arrangement, and a $985 million institutional mandate has been secured. Systematic equities now account for $1.7 billion of Magellan’s AUM.
“The early momentum we have generated with Vinva highlights the value of our distribution strength and institutional grade platform as well as the high-quality investment expertise of Vinva,” Rahmani said.
Asked by an analyst on the results webinar, Rahmani and chief financial officer Dean McGuire discussed how it could utilise its current asset surplus of $145 million and whether it could be making further acquisitions.
McGuire said: “We are still looking at different opportunities for deployment of that capital into further strategic partnerships, but we are conscious of the need to balance that with the return to shareholders. With the buyback still active, we will continue to look at that as a viable avenue for utilisation of that capital. We do continue to want to grow the strategic partnerships component of the business.
Rahmani added: “We continue to consider a range of opportunities. It’s balancing the strategic imperative that we do want to add new specialist financial services to our business with the strict and precise criteria around the businesses we are seeking and the partnerships we want to form. We have not made further acquisitions post-Vinva, but are having a number of live discussions.”
AUTHOR
Laura Dew
Recommended for you
Insignia Financial has reported net inflows of $448 million into its asset management division in the latest quarter, as well as popularity from advisers for its MLC managed accounts.
Two Australian active fund managers have been singled out by Morningstar for their ability to achieve consistent performance and share price growth in the past 12 months.
Pinnacle Investment Management has expanded its private market coverage, forging a strategic partnership with a private markets manager via a 13 per cent stake acquisition.
Active fund managers without a strong distribution platform will be “left behind”, believes Magellan, as it pivots its business away from being a traditional asset manager.
