Unfortunately, getting Hamish involved again won't help them....

Unfortunately, getting Hamish involved again won't help them. The only things that can turn this MFG ship around now are:

1) major outperfomance (and it's not going to be easy to do this without taking on a lot of risk, which could backfire, but they could get lucky)

2) a big cut in fees charged, to stop the volume of outflows (which will hurt their earnings but is necessary for this business to remain sustainable)

3) a corporate deal to salvage value for shareholders. Barrenjoey is a good investment bank and they may be able to engineer a deal to merge the Magellan business and FUM with another larger operator who has investment credibility and who can shed a big portion of the Magellan staff costs without losing too much more FUM. Such an operator may be able to justify paying $20+, and such a deal, if it can be engineered, would be a win/win for any rational MFG shareholders and Barrenjoey. Barrenjoey would obviously earn fees on the deal and would be further incentivised by the potential to buy back their equity from MFG fairly cheaply (because of a "change of control" event at MFG...most standard shareholder agreements have such clauses). Let's face it, the Magellan "halo" has slipped and investment bankers are usually the first to ask "but what have you done for me lately?". Barrenjoey will behave no differently.


Without at least one of the above occurring, I expect that the FUM outflow and share price decline will continue, as they are being outcompeted by other managers with lower fees and better performance e.g. GQG are killing it in performance terms and at a fee load which is circa 40% lower than Magellan. MFG need to face reality...bringing Hamish back won't move the dial for them. In fact, many will see it as a failure to admit the mistakes of the past.