Magellan reports another FUM fall

Magellan Financial Group has reported another decline in funds under management (FUM) after experiencing net outflows of $3.6 billion last month.

In a statement to the ASX on Thursday, Magellan stated that its FUM sat at $50.9 billion as of the end of September, down from $57.6 billion at the end of August.

Institutional FUM dropped from $36.2 billion to $31.1 billion, with net institutional outflows of $3.2 billion. The firm noted that approximately half of these outflows related to the liquidity requirements of one of its clients who was impacted by global market volatility late last month.

Meanwhile, retail FUM fell from $21.4 billion to $19.8 billion, with Magellan experiencing net retail outflows of $0.4 billion throughout September.

Of the $50.9 billion in total FUM, $26.1 billion was in global equities (down from $30.7 billion), $16.8 billion was in infrastructure equities (down from $18.5 billion) and $8.0 billion was in Australian equities (down from $8.4 billion).

Last month, the firm provided additional details relating to Hamish Douglass' consultancy role which was originally announced in June.

Mr Douglass, who ceased to be a permanent member of the firm's staff in June, will be paid $400,000 per annum for consultancy services.

“Having regard to the scope and frequency of the services to be provided by Mr Douglass under the consulting agreement, the fees payable are commensurate with the fees paid to other consultants engaged by the group,” Magellan said last month.

“The board considers that Mr Douglass remains an important resource for the company.”

Ahead of its AGM later this month, Magellan chairman Hamish McLennan said that the firm is currently undertaking a board review and renewal program to “ensure we have the right skill mix, expertise, independence and diversity” to support its future strategic direction.

As part of this program, the firm is targeting a board of seven, made up of six independent, non-executive directors and managing director, David George.

Over the past year, Magellan has seen the resignation of its CEO Brett Cairns and the loss of its largest institutional mandate with St James's Place, as well as the departure of Mr Douglass in what has been a tumultuous period for the fund manager.

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.