After a tumultuous summer, Magellan Financial Group will prioritise re-building trust with advisers after it posted record half-year financial results.
It was a massive win for the under-fire firm that suffered multiple set-backs in December and poor performance in 2021, leading to co-founder Hamish Douglass taking a medical leave of absence.
Stepping in as interim lead global portfolio manager, Magellan co-founder Chris Mackay took a pragmatic view of where the company is heading.
“We will only be trusted if we deserve to be trusted,” Mackay said in a webcast covering the results. “In some cases, we must deserve to be trusted to re-build trust.”
Magellan reported a 24 per cent increase in net profit after tax from $202.3 million in 1H21 to $251.6 million, in its business update to the ASX.
Hamish McLennan, filling in for Douglass as Magellan’s chair, credited his predecessor for the positive results.
“It’s been a challenging period for the company, part of which has been Hamish Douglass’ medical leave of absence and we wish him all the very best and a speedy recovery,” McLennan said.
Mackay added that Douglass is recovering and will potentially return to the company in the near future.
“We’re already working on a thoughtful structure for him to come back safely to focus on investment, to re-connect with global clients and deliver what investors need,” Mackay said.
No place for St James
On December 17, the loss of the $23 billion investment mandate from British wealth manager St James’s Place capped the nightmare year for the group.
Morton reiterated that no mandate is bigger than the group and pointed to the diversity of the institutional mandates it still held onto.
“We have four clients representing more than 2% of management and services fees revenue,” Morton said, with the largest client representing around 4.5 per cent.
“Our largest 30 institutional clients represent 28 per cent of our management and services fees.”
Funds under management (FUM) reached $112.7 billion at 1H22, compared to $100.9 billion for1H21.
However, FUM decreased drastically over the last few weeks with Magellan reporting a total of $87.1 billion as of 9 February.