Magellan’s Douglass vacates CEO role to focus on stocks
Hamish Douglass, the co-founder and public face of the $74 billion asset manager Magellan Financial Group, is stepping down as chief executive to spend more time picking stocks.
Hamish Douglass speaking at the 2017 Morningstar Individual Investor Conference
Hamish Douglass, the co-founder and public face of the $74 billion asset manager Magellan Financial Group, is stepping down as chief executive to spend more time picking stocks.
Douglass will become chairman of the board and hand the CEO reins to executive chairman Brett Cairns.
Douglass will remain as chief investment officer and lead portfolio manager of Magellan's Global Equities Strategies, the company said on Thursday ahead of its annual general meeting.
Magellan described the move as a “considered evolution” of the financial powerhouse. Magellan's Global Equity Fund ranks third in the ten largest investments held by SMSF trustees, according to the latest Investment Patterns Survey.
The announcement did little to rattle Magellan's (ASX: MFG) stock price, which leapt more than 7 per cent in the day following the announcement. The stock was trading at $29.55 at 2.30pm Sydney time on Friday.
Douglass will also step down from the board of Magellan Asset Management, Magellan's main operating subsidiary, with chief financial officer Kirsten Morton taking his place.
"These changes reflect a considered evolution of Magellan with day-to-day operating management of the company being overseen by Dr Cairns, and Mr Douglass' increasing focus on his key role as chief investment officer and the lead portfolio manager of Magellan's global equities strategies," Magellan said in a statement.
"Mr Douglass and Dr Cairns will continue to work jointly on the strategic development of the company."
Morningstar senior analyst, manager research Michael Malseed said he was pleased to see the separation of day-to-day operational management and investment roles given the increasing complexity of the business following the acquisition of Airlie Funds Management in February.
"This enables Douglass to increase his focus on his core roles of CIO and lead portfolio manager of Magellan’s Global Equities strategies, which is a good outcome for investors," Malseed says.
While Malseed prefers boards to have an independent chair, he insists Douglass – as both co-founder and a major shareholder – has been, and will continue to be, instrumental in setting the strategic direction of Magellan.
Malseed is conducting a comprehensive review of the global equities. Until then, he maintains his current Analyst Ratings:
• Magellan High Conviction (19878) – Silver Morningstar Analyst Rating
• Magellan Global (15699) – Gold Morningstar Analyst Rating
Incoming chief executive Brett Cairns has been with Magellan since 2007 when he was appointed a non-executive director, before becoming chairman of the board in 2013. His role expanded to executive chairman in 2015.
Magellan also updated the market on its net profit, which rose 8 per cent in fiscal 2018 to $211.7 million, while revenue jumped 34 per cent to $452.6 million. Funds under management fell from $74.6 billion to $74.5 billion in the year to 31 August 2018.
Data from latest Investment Patterns Survey, which analyses the accounts of more than 2500 SMSFs with $3.2 billion collectively under management, show the fund appearing at number three in the list of the 10 largest investments held by SMSF trustees.
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Emma Rapaport is a reporter with Morningstar Australia, based in Sydney.
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