Magellan Financial Group Ltd (ASX:MFG) (Magellan or MFG) is an Australian-based global funds management company.  It manages funds and mandates across three categories:  Global Equities, Infrastructure Equities and Australian Equities.

Magellan was established in 2006 and became a leading asset management franchise in Australia, especially among retail investors and independent financial advisers.

Investment underperformance as financial markets emerged from COVID-19 and then personnel change led to a loss of confidence and substantial outflows.

The Opportunity

While perceptions of Magellan might be negative, its investment strategies have all outperformed their benchmarks since inception.  Sandon Capital considers Magellan remains a quality investment manager.
Sandon Capital considers Magellan to be deeply undervalued and misunderstood by the market.  Magellan shares trade at a significant discount to their intrinsic value as well as a substantial discount to its peers
A large proportion of Magellan’s current market capitalisation is accounted for by cash and investments Sandon Capital considers as non-core. Sandon Capital considers this provides considerable down-side protection for its investment in Magellan.


March 2023




Sandon Capital met with Magellan management in May 2023 and then wrote to the Directors of Magellan.  We made five recommendations in that letter.  These were:

1. Return excess capital to shareholders

2. Prioritise the existing business

3. Review the cost base

4. Provide further Share Purchase Plan (SPP) relief

5. Accelerate Board renewal and improve Board diversity

If the Board is prepared to adopt our recommendations, we expect the market price and value of Magellan shares should improve significantly.

On 27 June 2023, we made public a presentation that detailed our investment thesis and the basis of these five recommendations.   We intend to discuss our five recommendations with other Magellan shareholders and remain open to discussions with the Magellan Board. You can read the presentation here.

On 16 October 2023, we wrote to the Magellan Board advising on how we planned to vote at the upcoming AGM.

We intend to vote AGAINST the remuneration report for two reasons:

1. Failing to institute improved variable incentive practices

2. Having excessive CEO remuneration

We also intend to vote AGAINST the re-election of John Eales as a director.  He is the Chair of the Remuneration Committee, and we believe he has a greater responsibility than other directors for the oversight of remuneration policies at Magellan and therefore must be held accountable for what we consider failings in Magellan’s approach to remuneration.

We intend to vote FOR the (re)election of all other directors.

The letter can be read here.



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Past performance is not indicative of future performance. The content of these case studies constitutes the views and opinions of Sandon Capital. They have been prepared without taking into account the objectives, financial situation or needs of any particular individual. The case studies do not constitute advice.

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