Magellan’s biggest client, British wealth manager St James’s Place, then abruptly withdrew its mega $23 billion dollar investment mandate, triggering a collapse in Magellan’s share price.
Value funds management houses tend to be built on the individuals making the investment picks. That was certainly the case with Mr Douglass who, since co-founding Magellan in 2006, has cultivated a high public and media profile as Australia’s wannabe version of legendary US investor Warren Buffett.When our Rear Window column broke the story of the separation, Mr Douglass denounced the media interest in his and his wife’s personal lives.
Under new chairman Hamish McLennan, co-founder Chris Mackay has returned to take control of the global equities portfolio. The second coming of Mr Mackay, who stepped down as executive chairman in 2013 and has since focused on Magellan’s smaller listed fund MFF Capital Investments, has been endorsed by leading business figures including Kerry Stokes and Matthew Grounds of Barrenjoey Capital, which is part-owned by Magellan.
That is the view of Wilson Asset Management chairman Geoff Wilson, who says Magellan’s share price – which has fallen 65 per cent in the last six months – “is really the consequence of not being transparent enough to investors.” Mr Stokes agrees that greater transparency “would have been valuable”.