Magellan maintains infrastructure flows post-Stack exit
Magellan’s infrastructure funds have reported gains for the second consecutive month, avoiding potential outflows associated with the exit of its sector head Gerald Stack.
In the monthly update released to the ASX, the fund manager said its latest funds under management (FUM) for March saw assets fall 2.8 per cent from $38.6 billion to $37.5 billion.
This was due to net outflows of $0.6 billion – $0.2 billion from retail investors and $0.4 billion from the institutional channels. This was slightly higher than outflows in the previous month which stood at $0.5 billion.
These flows caused retail FUM to fall 5 per cent from $15.7 billion to $14.9 billion, while institutional ones fell from $22.9 billion to $22.6 billion, a drop of 1.3 per cent.
The figure brings FUM in line largely to where it was a year ago, with total FUM standing at $37.3 billion back in March 2024.
Breaking it down by specific asset classes, global equities and Australian equities both reported a drop of around 5 per cent in FUM during March, while infrastructure saw a moderate rise.
Global equities, which includes its flagship Magellan Global Fund run by Arvid Streimann and Alan Pullen, dropped by 5.6 per cent from $14.2 billion to $13.4 billion. On the Australian equities division, FUM fell by 5.2 per cent from $7.6 billion to $7.2 billion.
Infrastructure FUM rose from $16.8 billion to $16.9 billion, offsetting the departure of its investment head Gerald Stack with the second consecutive month of gains. During February, assets had risen from $16.7 billion to $16.8 billion.
It was announced at the end of January that Stack would be departing the business in July, and it has since confirmed portfolio manager Ben McVicar will be taking over as head of infrastructure, although a head of investment is yet to be confirmed.
This had initially sparked concerns of significant outflows given Stack has been with the firm for 18 years and the fact that infrastructure assets are typically held by institutional investors who are less sticky to funds than retail ones.
Speaking in February, 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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