Fund managers, page-198

Hi @Plague

I believe the culture is critical too. Magellan is in a bit of a pickle with this. There are a lot of highly talented staff in its funds management business and the investment bank. A lot of investment bank staff were poached with top salaries and Magellan shares when the price was much higher.

Most employee share plans have an inbuilt discount pricing mechanism (contribute $5k and we will contribute $5k on your behalf). Effectively buy the shares for half price. Unfortunately for most Barren joey employees the shares will only be just above water and won't come out of escrow for a couple years. Can't imagine any of them waiting around for two years to get a mediocre return on investment.

Investment bankers are pretty brutal when it comes to this and expect short term performance. There is probably something a bit more happening behind the scenes about staff retention and whether there is increasing staff turnover due to this.

Have reviewed normal sources (Glassdoor and seek) and there isn't much conversation going on. Do you have another source or know of people that work at Magellan that are leaving?

In terms of the Magellan boards posters, I have grown accustomed to the attacks and believe the blow torch application of views can help me improve a lot of my thinking. I am a lot stronger in what I need to look for in a great investment. Find the personalities and attitudes very interesting and straight out of a psychology 101 book - denial, anger, blame. There is a few that accept, but denial in a lot is really hope in the Magellan business getting back to 30 times earnings again (the blind eye to underlying problems). Don't see a turnaround happening for another year or so, if they manage to turn the business around at all. It is very difficult to do so. Look at Platinum - believe they have an exceptional team and the funds are performing very well. Dr Bianca Ogden is super smart and has some genuine insight in the Health vertical, as does Andrew Clifford in Brands and his other portfolios.

Getting attacked on a number of fronts and when there is no deep thought or detail in the attacks, I know I am getting closer to something that is an accurate picture. I am not perfect and happy to not be so.

In terms of monitoring the FUM business, I use the following table:


This gave me an indication around August 2020 the business wasn't performing as well as it should have been, see post here: https://hotcopper.com.au/threads/ann-funds-under-management-august-2020.5608394/

It wasn't perfect timing but it came very close. I have improved this table over time to reflect what I felt was good feedback and trying to keep it simple with all the feedback (can only put so much in - outflows and inflows would be nice, but I think it is best kept in a separate table).

I really liked the table you put together on showing outflow/inflow actual/estimated. I have been working on something similar, with forward currency contracts. I have found the information on FX weighting for each fund (it is on page 12 of the 2021 annual report under Revenue section - no need to waste time looking through quarterly reports as suggested). It looks something like this:


I haven't back tested it yet to the previous months (something I picked up from your table that I should do).
Here is the outcome so far:

Suspect back-testing will allow me to iron out wrinkles.

Best of Luck
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