Shares of Magellan Financial Group (MFG) surged to their...

Shares of Magellan Financial Group (MFG) surged to their highest level in 22 months after the asset manager posted a 31% rise in its annual profit and announced a deal to buy a minority stake in an investment management firm.

The stock rose as much as 11.2% to A$10.01 to its highest level since Oct. 19, 2022, and is among the top gainers on the ASX 200 benchmark index.

The company posted a net profit after tax of A$238.8 million ($158.13 million) for the full year ending June 2024, up from A$182.7 million from a year earlier on higher performance fees and lower expenses at its funds management business.

Additionally, the company inked a strategic partnership with Vinva Investment Management, an Australia-based global investment management firm, to acquire a 29.5% stake in the latter's parent entity, Vinva Holdings, for A$138.5 million.

The deal gives Magellan exclusive rights to distribute Vinva's products and investment strategies through its global distribution team.

Both parties also intend to collaborate on new product initiatives in Australia and globally.

"It does add additional product that Magellan can distribute globally and expand its existing phase quite significantly," said Jun Bei Liu, a portfolio manager at Tribeca Investment Partners.

She attributed the jump in shares to the deal rather than the higher results, which were largely in line with expectations

The company declared an interim dividend of 28.6 Australian cents per share, down from 39.8 cents apiece. ($1 = 1.5101 Australian dollars)