Ailing fund manager Magellan discloses ‘termination of material contract’

Sydney investment firm Magellan has disclosed that it has lost a “material contract” with one of its major clients, after years of under-performance in its global equities fund and leadership instability triggered a sell-off in shares.

Magellan posted a statement on the ASX on Friday afternoon requesting a trading halt, pending a further announcement.

Magellan founder Hamish Douglass told shareholders mistakes have been made while delivering results in August. Credit:Janie Barrett

“The trading halt is being requested pending an announcement to be made by MFG. The announcement relates to the termination of a material contract,” according to the statement authorised by company secretaries Marcia Venegas and Mariana Kolaroski.

“MFG requests that the trading halt lasts until the earlier of the commencement of trading on Monday 20 December 2021 or when the announcement is released to the market.

“MFG is not aware of any reason why the trading halt should not be granted or of any other information necessary to inform the market about the trading halt.”

Magellan’s flagship global equities fund has reported chronic under-performance in recent years, after a series of poor investment decisions caused it to under-perform the benchmark by about 14.5 per cent over the past 12 months and about 5 per cent over the past three years.

One of Magellan’s largest clients, UK-based St James’ Place, has not responded to multiple requests for comment made by this masthead.

The trading halt comes after mounting pressure on Magellan following the abrupt resignation of chief executive Brett Cairns last Monday and the reluctant disclosure of founder Hamish Douglass’ marriage breakdown.

More to come.

Most Viewed in Business

Source: Read Full Article