Magellan Announces Global Equity Fund Restructure
Magellan Financial Group (ASX: MFG) has announced today to the ASX, that they will restructure the retail product offering of their Global Equities Fund. The fund is managed by their primary operating subsidiary Magellan Asset Management which has over $15 billion funds under management (FUM). The restructuring proposes a consolidation of the Magellan Global Fund and the Magellan Global Equities Fund into a single fund with two classes, Open and Closed.
Magellan Financial Group manages more than $97 billion in global equity and infrastructure strategies for clients based around the world. They have a wide range of funds that are both listed and unlisted on the ASX. Their central holdings are Microsoft, Alphabet, Facebook, Alibaba, Visa and Mastercard and have performed extraordinarily well during the market rebound since March 2020.
The consolidation of Magellan’s funds will provide an entitlement offer to existing unitholders to subscribe for new Closed Class Units with an attached bonus three-year option. The offer will be made at a 7.5 per cent discount to the prevailing Net Asset Value (NAV) per unit, at the time of exercise. Magellan will pay the full cost of the restructuring funding it through undrawn corporate debt facilities.
Magellan Financial Groups Chairman, Mr. Hamish Douglas said “We believe that combining Magellan’s three core global equity trusts into a single unified trust with a listed open class unit which can be transacted off-market and a listed closed class unit is a groundbreaking innovation.”
This announcement follows the Group's 2020 review, discussing their largest holdings in the Infrastructure fund such as American Water, Atmos Energy, Enbridge, and Eversource. The financial group also announced $249 million in net inflows during 2020 $173 million from retail and $76 million from institutions. Their performance Fees in 2020 were $81 million, and funds under management grew by 25 per cent in 2020. The announcement, however, did not excite investors as the group’s FUM fell by $1.3 billion from 29th May 2020 to 30th June 2020.
As Magellan announces its global equity restructure, the group focuses its efforts to manage the impacts of COVID-19 in the new financial year. In response to the pandemic, Magellan made significant adjustments to its Infrastructure fund. They sold off investments in airports railroads and at one-point increase cash reserves from 4-15 per cent. Magellan’s reputation, past performance and strong financial position, places them in good stead to manage the pandemic while volatility and uncertainty remain pertinent in financial markets.
As of 3rd August 2020, at 12 midday, Magellan Financial Group is trading at $60.60. The share price is up 100 per cent from its March lows but still trades off its all-time highs are at 74.77. On 31st July 2020, Magellan announced a full year results briefing on 12th August 2020.
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