Magellan puts US in its sights for growth

20 February 2024
| By Laura Dew |
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Magellan has detailed its plan to revamp its business in the US, with executive chairman Andrew Formica saying he can see a “tremendous opportunity” for the firm. 

Speaking on a webinar after the firm’s full-year 2023 results, Formica said the US is an “attractive growth area” for the firm. 

A plan is in place to revamp the US distribution platform as a multi-boutique business that will service and distribute the firm’s investment strategies as well as those of third-party managers in which Magellan has acquired equity stakes. 

Formica said: “Our existing product capabilities have some attraction to the US, particularly in global and infrastructure strategies, and we believe investing in and distributing funds by third-party managers provide significantly growth optionality for Magellan. 

“I see tremendous opportunity in the US due in part to its sheer size; the US market remains the most attractive and largest capital pool in the world, and we do not need to have a large share of the market to be incredibly successful. 

“With an experienced and entrepreneurial leadership team now in place, Magellan has an incredible opportunity to leverage our existing platform to offer an enhanced and differentiated product and attract investment talent.”

Its existing infrastructure, which is embedded in its Frontier platform, will allow for the changes to be made immediately with limited incremental expenses. 

Other priorities during 2024 include launching the Magellan Unconstrained Fund to retail clients, growing its investment team, building on its ESG commitments, and maintaining strong investment performance. 

The Magellan Unconstrained Fund is a global equities strategy managed by Alan Pullen, launched in 2022, which will complement the Magellan Global Fund, but is unconstrained from the risk ratio constraints of the flagship fund. The firm said this is likely to be made available for retail investors in the second half of the year.

In its financial results, it reported a statutory net profit after tax (NPAT) of $104 million, up 24 per cent from $83.8 million in the prior corresponding period.

Average funds under management (FUM) was down 31 per cent from $53.8 billion to $36.9 billion.

 

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