Magellan sees FUM slip

Magellan Financial Group’s funds under management (FUM) slipped to $39.0 billion at the end of August, down from $39.2 billion at the end of July.

In its monthly FUM update released to the ASX on Wednesday, the fund manager said it experienced $0.3 billion in net outflows during August. This included net retail outflows of $0.4 billion which were partially offset by net institutional inflows of $0.1 billion.

Of Magellan’s total FUM, $17.5 billion was in the retail channel, compared to $17.8 billion in the month prior, while $21.5 billion was in the institutional channel, down from $21.4 billion.

Infrastructure equities FUM suffered a fall over the month, from $16.1 billion to $15.7 billion. Global equities FUM moved slightly higher, from $18.5 billion to $18.6 billion, with a similarly small rise for Australian equities FUM, which lifted from $4.6 billion to $4.7 billion.

The latest FUM update follows Magellan’s full-year results last month, in which the fund manager reported a 57 per cent drop in adjusted net profit after tax (NPAT) to $174.3 million.

“We have made a solid start to implementing our five-year strategy and have laid a foundation that can return us to growth in time,” Magellan chief executive officer and managing director David George said at the time.

“Our primary focus has been on delivering the investment performance we are known for, and we are encouraged that the changes we have made during the year have resulted in improved collaboration, information flow, and efficiency.”

Mr George reiterated that Magellan’s focus remains on driving investment performance as well as delivering disciplined cost and capital management.

“When investment performance is strong, positive inflows follow. To this end, we have made considered and deliberate changes this year to support investment performance and drive efficiency and collaboration throughout the business across the different strategies,” he said.

“What remains unchanged is our investment philosophy. We still believe investing in the world’s best companies is a path to creating and protecting long-term wealth, particularly in a high inflationary environment.”

Over the longer term, Mr George highlighted a focus on “sustainable growth that thoughtfully reduces the risk associated with concentration in a small number of strategies and individuals”.

“This involves taking steps to broaden and deepen the mix of our funds under management and thoughtful succession planning to future-proof Magellan against key person risk,” Mr George said.

“We are proactively looking at opportunities for growth in areas where there are increasing allocations in client portfolios such as alternatives or private markets. Our distribution, marketing, and operational capabilities built over many years provide us with a competitive advantage that provide a unique value proposition for fund managers.

“Importantly, our approach to inorganic growth is disciplined. Any acquisition or investment we make will be timely, strategic, scalable, and complementary to our existing business and ultimately create long-term shareholder value and sustainable revenue growth.”

Magellan Financial Group also recently announced a number of board changes, including the appointment of Andrew Formica as non-executive chairman.

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.