Magellan net profit tumbles 27%; lifts dividend
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More news: Magellan’s share price rose 6.58% to $8.66 by 11:38am AEDT after it posted first-half earnings that saw flat operating profit.
During an investor call, Magellan CEO Sophia Rahmani answered a question regarding its drop in performance fee. She said it was due to a change in fee structure.
“As part of the changes we made to the High Conviction Fund in August last year, we removed performance fees. As we converted that strategy to the global opportunity strategy, we completely changed the fee structure for that. I would say that’s a great example, which was very well received by the global equity team and the distribution team to have a 75 basis point flat fee in the market, which hopefully is well received by our clients as well,” Rahmani said.
“And again, we’re seeing some early attraction to that. So I’d say from any kind of loss of morale from a performance fee perspective, which I don’t think we saw, has actually been offset by us seeing a contemporary product with a strong performance, like Global Opportunities, with some sharp pricing made available to our clients.”
Rahmani said the fund manager did not have an open search for a new head of global equities following the departure of Arvid Streimann.
“We were very pleased to have the strong bench strength with Alan Pullen and Casey McLean, they’re already co-PMs of the global fund and ready to step in as interim co-heads of that business,” she said.
“So for now, we’re very pleased with how that’s gone, and we continue to monitor overall resourcing of that team.”
Magellan net profit tumbles 27%
The news: Magellan Investment Partners has posted a 27% tumble in net profit after tax to $121 million for the six months to December 2025.
The fund manager said its NPAT fall was due to unrealised fair value movements in fund investments.
The numbers: Operating profit was flat at $83.1 million. Assets under management lifted 5% to $40.2 billion and performance fees were at $31,000, down 99%, from $6.1 million.
Its investment management revenue fell 17% due to “product mix changes resulting in a lower average management fee and growth in systematic equities leading to higher sub-advisory fees”. However, Magellan said this was offset by an increase in income from strategic partners (up 109%) and fund investments (up 14%).
Magellan also declared an interim dividend of 39.5 cents, up from the prior corresponding period of 26.4 cents.
The fund manager also returned $38 million of capital during the half through its ongoing share buyback program.
What they said: Magellan chief executive Sophia Rahmani said: “In a challenging environment for active managers, MFG delivered earnings growth, maintained a strong balance sheet and continued to return capital to shareholders”.
The source: ASX
