Last month Magellan Asset Management ran a national adviser roadshow. Over the course of two weeks in eight cities, the manager attracted 2230 advisers – up from 1280 the year before. Whatever it is that advisers want from a fund manager, it appears Magellan has it.
On October 9, Magellan was named Fund Manager of the Year in the Professional Planner|Zenith Fund Awards 2015.
David Wright, managing partner of Zenith Investment Partners, says successful fund managers “really need to be able to add value to the adviser’s business”.
That could be through “quasi-consulting on what other advisers are doing on best practice and so forth, or in the case of Magellan, really being able to communicate and update what’s happening in the funds and specifically the portfolios”, Wright says.
“Advisers love to be able to provide their clients with stories on their investments. That’s exactly what Magellan provides to advisers, and that’s why it’s gained in popularity and usage. They can communicate what [chief executive officer and chief investment officer] Hamish Douglass and the team are doing in the portfolio. That’s what [advisers are] getting directly from the BDMs [business development managers].”
Wright says Zenith often teases Magellan’s general manager of distribution, Frank Casarotti, that “Hamish is the best business development person in the place”.
“But there’s an element of truth in that,” Wright says.
“They put on their own roadshows now, appear at Graham Rich’s PortfolioConstruction Forum Conference, and various forums for advisers. [Douglass] has always had that either left-field or thought-provoking view, where people go, ‘Gee, that’s interesting, I can use that with clients’.
“It’s not trotting out the same, ‘This is what the portfolio has done’. A lot of it is forward-looking stuff, which is terrific.”
Wright says the fund awards recognise more than just investment capability. They also pay heed to broader aspects of managing a fund management business.
“Increasingly what we’re finding is that the sales, marketing and distribution function is critical to the success of managers,” he says.
“As an example, we’re getting a lot of global managers coming to the Aussie market; they may have a mandate or two down here, or even not; and they want to have a slice of the action in the retail sense. And yet, a lot of them are not properly resourcing up from a sales, marketing and distribution function and perspective.”
Wright says it’s not enough any more for business development managers to simply deliver brochures and host golf days.
“And in fact, you’ve got to make that investment [on sales, marketing and distribution] upfront,” Wright says.
“Magellan is probably a good case study in this: they’ve got a very good and diverse business development team now, but they did actually start off with some senior people: Frank Casarotti and [head of institutional clients] Matthew Webb and so forth.
“These guys wouldn’t have come cheaply when they were just building the team. So you’ve got to make that investment commitment early, rather than saying we’re going to build [the business] and as FUM [funds under management] grows we’ll start to invest in business development.
“The business development investment has to be taken on board and made upfront these days.”
