Once viewed among the premier fund managers in the country, a challenging end to 2021 has seen the total funds under management at Magellan almost cut in half.
Magellan’s FUM was just above $116 billion at the end of November last year, but has shrunk to $61.3 billion at the close of the financial year.
The first major hit was the loss of the $23 billion investment mandate from British wealth manager St James’s Place which led total FUM hitting $95.5 billion at the end of 2021.
In an announcement to the ASX, it attributed the continued reduction in FUM to market volatility, foreign exchange and net outflows.
However, it stated the fund manager has earned estimated performance fees of approximately $11 million for the financial year. In contrast, it earned $30 million for the previous financial year and $80 million during FY20.
This week also saw the announcement that long-time head of distribution Frank Casarotti would retire at the end of 2023.
In February Magellan chair Hamish Douglass announced he would take a leave of absence due to “intense pressure and focus” on his professional and personal life.
Criticism of Douglass gained momentum due to the fund manager’s underperformance in 2021. The Magellan Global Fund underperformed its benchmark by 10 per cent, returning 19.28 per cent for the year.
Douglass’ role as chair was taken over by deputy chair Hamish McLennan while his role overseeing portfolio management was filled by Magellan co-founder Chris Mackay.
Douglass officially departed the company on 15 June as a permanent member of staff but will return in a consultancy role from 1 October.
Brett Cairns resigned as chief executive on 6 December, 2021, with chief financial officer Kirsten Morton replacing him in the interim.
David George was appointed on 11 May as new chief executive and managing director. He was due to commence on 8 August, but was later brought forward to 19 July.
George previously spent 14 years at the Future Fund and was most recently deputy chief investment officer for public markets.