I begin to wonder if we should begin to look at fund managers another way. So far, the main way to look at fund managers was to identify the ones who were able to attract inflows, thanks mainly to the performance of their funds. There is now a clear change in this industry, where more and more fund managers tend to be involved early into stocks, not hesitating to invest pre-IPO. Of course, Magellan is a good illustration. But they are not the only one, with Regal and Perennial being quite involved in the pre-IPO market. More and more fund managers are following this trend.
This trend makes a lot of sense, as it is often a good way to be able to buy shares at a better price, than when stocks are listed later on. It is also another way for fund managers to use their research capabilities and develop new business, while they struggle to get new inflows.
The difficulty for investors is to value such a new business. It is obviously the problem now with Magellan.
