We can rise again says Magellan by dumping the singular for the collective

ANALYSIS

There was only one reference to Magellan Financial Group founder and former chief investment officer (CIO), Hamish Douglass, at the fund manager’s annual general meeting this week – to his status as an “external consultant”.

However, the key to that reference by Magellan chairman, Hamish McLennan was that Douglass’ engagement would be overseen by chief executive, and new CIO, David George to “ensure that it supports investment and client outcomes and continues to benefit Magellan”.

Having suffered month after month of outflows, it was clear from the messaging of both McClennan and George to the annual general meeting that they wanted investors to look forward and not back with respect to Magellan, with the implication that, notwithstanding his consultant status, Douglass is very much a manifestation of the fund manager’s past.

Indeed, the key messages being delivered by the chairman and CEO were that Magellan was in the business of renewal, including board renewal, something which was reflected by the appointment of former First Sentier CIO, David Dixon to the board as a non-executive director and deputy chair.

The company is promising further Board renewal over the next six to 12 months aimed at delivering six non-executive directors and one executive directors.

“Despite the recent challenges, Magellan remains a fund manager of considerable underlying financial strength and great potential,” McLennan said referencing the fact that over 85% of Magellan staff are shareholders, “aligning them with the interests of our other shareholders”.

For his part, George made clear that his role as CIO did not involve him as a portfolio manager stating, “rather I am here to think more broadly about where the world and our clients are evolving toward and shape our investment capability to address this”.

“I will aim to ensure effective, accountable, and well organised processes, drive excellence in portfolio construction and risk management, and empower our team of portfolio managers and research analysts by providing them with the right resourcing and tools and removing every distraction possible so they can give maximum focus to performance,” he said,

George said that Gerald stack, as deputy CIO, would be focused on getting the team to work more efficiently, collaborate more and generate investment ideas faster and wider than previously”.

“These changes have been communicated to our clients and we will continue engaging them, as well as other key stakeholders such as the research houses, to address their questions in the coming weeks.”