Magellan’s Formica on growth ambitions via fund expansion

In his first shareholder letter, Magellan’s new chairman, Andrew Formica, says he is “deeply motivated” to return the fund manager to a growth footing.

Announcing the next annual shareholder meeting on 8 November, Formica said he believes the firm is “well-positioned for success”. 

Formica, who is the former co-chief executive of Janus Henderson, joined Magellan in July as a non-executive director and was shortly promoted to non-executive chair. 

According to Formica: “The 2023 financial year was the first year of our five-year strategy to position Magellan for the next phase of its evolution from a founder-led business into a more diversified global fund manager of scale that, through the delivery of exceptional investment performance for our clients, seeks to deliver sustainable growth and attractive shareholder returns.

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“In parallel with improving performance across our existing funds, we will leverage Magellan’s high-quality platform to deliver growth by expanding our offerings in ways that are additive and do not dilute Magellan’s existing strengths.”

Formica and chief executive, David George, previously discussed opportunities for expansion via organic and inorganic growth as it seeks to return to $100 billion in assets under management. Statistics last week showed the firm has currently $35 billion in assets under management, down from $39 billion in the previous month.

“During FY23 we announced our new Energy Transition Investment Strategy, the relaunch in March of our Magellan Core Series and the launch of our new Airlie Small Companies Fund. While it will take time for these investment strategies to develop and grow, they have received positive initial feedback and interest to date,” he stated.

“We also look forward to the future needs of our clients and seek to expand Magellan’s platform in a value-enhancing manner as appropriate opportunities arise.”

He also touched on the board renewal process which has now been completed with the appointments of himself, David Dixon, Deborah Page and Cathy Kovacs. They will replace Karen Phin, Robert Fraser and Colette Garnsey.

“These appointments have sought to ensure the board has the right skill mix, expertise, independence and diversity to support Magellan’s growth. The board will be comprised of six independent non-executive directors, of which 33 per cent are female in line with our gender diversity target, and one executive director. 

“Importantly, we have added significant funds management experience to the board and have balanced renewal and fresh perspectives with corporate knowledge retention.”