Shares in Australian asset manager Magellan Financial Group have plummeted over 30% on Monday after St James’s Place confirmed it was yanking £9.7bn worth of mandates from the global equities manager.
In a regulatory filing, Magellan, which had assets of A$116bn (£62.4bn) at the end of November, said the mandates accounted for 12% of current year revenues and were expected to deliver a 6% hit to 2022 revenues. Shares fell 32.9% on the news in a boon for short sellers who had been circling the stock before rumours of the SJP loss were confirmed.
Magellan co-founder and CIO Hamish Douglass ran the SJP International Equity strategy and co-managed the SJP Global Growth strategy. An SJP spokesperson confirmed State Street Global Advisors had been appointed as a replacement manager effective from 20 December.
“We regularly review fund managers across the portfolio and our model allows us to change manager at short notice if we deem it appropriate to do so,” the spokesperson said.
The appointment represents another win for SSGA after it was appointed to co-manage the £14bn SJP Global Equity strategy in November, alongside Man Numeric and LA Capital, replacing Blackrock, JO Hambro, Edgepoint and Sands Capital.
The loss of the SJP mandate comes at a turbulent time for the company. Its chief executive Brett Cairns suddenly resigned a fortnight ago and shortly after Douglass was forced to admit he was separating from his wife. The share price came under pressure due to expectations of a liquidity event resulting from the divorce, the Sydney Morning Herald reported.
Magellan is not the first asset manager to take a major blow from a lost SJP mandate. This month, Majedie revealed the loss of £1.9bn worth of UK equity mandates with the wealth manager had contributed to a 19% fall in value for its asset management business.
