Magellan chair Hamish Douglass announced he would take a leave of medical absence after “intense pressure and focus” on his professional and personal life.
In an announcement to the ASX, the board of Magellan Financial Group (MFG) said Chris Mackay would oversee portfolio management of the firm’s global equity retail funds and institutional mandates. Mackay was co-founder, as well as the inaugural chair and chief investment officer of Magellan until 2012.
Deputy chair Hamish McLennan would replace Douglass as independent non-executive chair.
“The board wholeheartedly supports Hamish’s decision to prioritise his health and Magellan is committed to providing him the time and support he requires,” McLennan said.
In light of the news, investment research firm Morningstar had placed the Magellan funds managed by Douglass ‘Under Review’.
“Given Douglass’ integral involvement in the business and managing Magellan’s global equity strategies, we have placed the Magellan Global and Magellan High Conviction strategies ‘Under Review’,” Morningstar said.
“A formal review of these strategies, including a comprehensive parent review, will be undertaken in the coming weeks and our updated view will be published soon after.”
It followed a particularly tumultuous end to 2021 for Magellan as Brett Cairns resigned as chief executive on 6 December, 2021, with chief financial officer Kirsten Morton replacing him in the interim.
On 8 December, in response to rumours about his personal life, a statement from Douglass and his wife Alexandra confirmed they had separated months earlier and neither party would sell their shares in the group.
Finally on 17 December, Magellan Asset Management, a subsidiary in the group, was notified by English wealth management firm St James’s Place that it would terminate its mandate.
Douglass had come under criticism for underperformance in 2021 and the Magellan Global Fund underperformed its benchmark by 10 per cent, returning 19.28 per cent for the year.
The MFG share price hit a high of $73.67 on 14 February, 2020, before the Covid-19 pandemic begun. It closed at $53.66 at the end of 2020 and was $18.51 at close on Friday 4 February.
His last public appearance was last Thursday at the Morningstar Investment Conference where he did not address the floundering share price or insufficient investment performance, but conceded he underestimated the difficulty of investing in China.
At the conference, he reiterated the strength of the underlying investment infrastructure the group had to offer.
“I would hope if people look at our portfolio and they think about what we’re invested in – and not just thinking about where share prices have been – I would hope people would be confident that we’re holding a super high-quality hand,” Douglass said.
Douglass’ absence meant he would not be part of the group’s half year results announcement, which was scheduled for 17 February.