Magellan Financial Group Ltd · ASX:MFG
Magellan Financial — Shareholder Meeting (October 2021)
38 slides from Magellan Financial's shareholder meeting presentation, Oct 21, 2021
Slide 1: CEO's Address to the 2021 Annual General Meeting
CEO’s Address to the 2021 Annual General Meeting Thursday 21 October 2021 For personal use only Thanks Hamish, and thanks everyone for attending the meeting today. Hopefully this is the last year we will be doing this as a virtual only meeting, as I think we are all looking forward to the difference
Slide 2: For personal use only
Magellan’s asset management business was founded a key premise, that we put our clients first. The business has always focussed on achieving the investment objectives we have set for our investors and we are constantly reminded of the responsibility we have in managing other people’s money. We have
Slide 3: For personal use only
Hamish participated in a webinar last week in which he clearly and succinctly discussed these issues in relation to the global fund, and I would encourage shareholders, and others who may be interested, to watch the replay which can be found on our website. Away from our global equities franchise we
Slide 4: For personal use only
The Airlie Australian Share Fund (ASX: AASF) recently passed its three-year track record and has performed strongly, meaningfully outpacing its benchmark. The fund carries recommended ratings by the main ratings houses, is appearing on a growing number of approved products lists, and is available on
Slide 5: For personal use only
We believe the approach employed by the MFG Core Series is thoughtful and differentiated relative to many systematic or factor-based fund alternatives. There is growing demand for lower-cost exchange traded funds to build portfolios, stretching from the millennial investor to the evolving managed ac
Slide 6: For personal use only
But there’s a catch. You can’t achieve this by just eroding your capital because you don’t know how long you are going to live, and you can’t achieve it by locking up all your money because things happen, particularly as you get older, and you may need to access it. The problem is these three things
Slide 7: For personal use only
Again, success is not built overnight, and we are very patient in that regard. Before leaving this topic, it is worth noting the Federal government is in the final stages of introducing what is known as the Retirement Income Covenant. This is to apply to the trustees of Superannuation Funds and seek
Slide 8: For personal use only
FinClear provides important trading infrastructure, services and technology solutions that support businesses in wealth management and stockbroking. For example, FinClear owns iBroker a post-trade system that underpins more than 15% of all transaction value traded on the ASX and Chi-X exchanges, inc
Slide 9: For personal use only
Notwithstanding GYG is investing in growth, it is profitable and has significant cash on its balance sheet. We have invested $103 million and own a 12% fully diluted stake. Finally, Barrenjoey Capital Partners. Magellan is one of the founders of Barrenjoey and holds a 40% non-dilutive economic For p
Slide 10: For personal use only
In conclusion, we believe Magellan’s business is very well positioned. Our core asset management business has significant scale and serves a diverse client base. There are clear areas of growth, each with substantial prospects and each serving client needs. Our investments through Magellan Capital P
Slide 11: Important Information
Important Information This document has been prepared by Magellan Financial Group Limited ACN 108 437 592 (‘Magellan’). This document contains summary information about Magellan and its related bodies corporate and is current as at 21 October 2021. While the information in this document has been pre
Slide 12: Magellan Financial Group Limited 2021
Magellan Financial Group Limited 2021 AGM Presentation For personal use only Brett Cairns| CEO
Slide 13: Overview of FY21 results
Overview of FY21 results For personal use only Funds Management business: Adjusted net profit after tax Average funds under Profit before tax and management $438.3m $412.7m performance fees -6% $103.7bn $95.5bn $526.6m $477.0m FY20 FY21 +9% Statutory net profit after tax +10% $396.2m $265.2m -33% FY
Slide 14: Adjusted net profit
Adjusted net profit For personal use only Reported net Unrealised capital Amortisation Transaction costs Costs related to Adjusted net profit profit after tax gains in Fund related to strategic MGF Options after tax Investment initiatives Segment Magellan| 3
Slide 15: Dividends
Dividends For personal use only cps 240 214.9 cps 211.2 cps Performance fee dividend 200 of 11.5cps 160 120 Ordinary dividends 80 of 199.7cps 40 0 2020 2021 Interim DPS Final DPS Annual Performance Fee DPS Magellan| 4
Slide 16: Funds Management Business
For personal use only Funds Management Business Magellan| 5
Slide 17: Funds Management business
Funds Management business For personal use only • Founded on a key premise: put clients first • Improve outcomes for clients • Highly scalable platform • Rigorous, risk focussed investment process • Relationship centred distribution • Firm-wide deep knowledge Funds Management business has developed
Slide 18: Diverse client base
Diverse client base For personal use only Significant number of institutional clients… …with meaningful diversity >130 Only FOUR Institutional clients represent more than 2% of total Institutional clients management and services fees Deep and long standing adviser relationships… …and growing direct
Slide 19: Global Equities franchise
Global Equities franchise For personal use only >$80bn in FUM Three portfolio managers: Main strategy consistently achieves two - Hamish Douglass objectives: - Arvid Streimann 1• Compounding returns of 9% p.a. (net) - Chris Wheldon •2 Lower risk than markets Two strategies - main strategy and high c
Slide 20: Global Equities franchise (cont'd)
Global Equities franchise (cont’d) Since inception the Global Fund has been Consistently compounding returns For personal use only exposed to only 45.3% of market downside 18% 17.4% 0 14.4% 14.8% 15% 12.5% Magellan 11.9% 12.1% 12% Global Fund 9% 9.0% p.a. MSCI World objective Net TR Index -50% 6% 3%
Slide 21: Five key growth areas
Five key growth areas For personal use only GLOBAL LISTED AIRLIE FUNDS SUSTAINABLE MFG CORE SERIES FuturePay TM INFRASTRUCTURE MANAGEMENT / ESG Combined FUM of ~$30bn with significant growth opportunities Magellan| 10
Slide 22: Global Listed Infrastructure
Global Listed Infrastructure For personal use only ~$20bn in FUM Led by Gerald Stack, the infrastructure Broad client base team has developed a significant business Differentiated approach and excellent performance SELECT CORE Still underrepresented in portfolios STRATEGY STRATEGY actively managed s
Slide 23: Airlie Funds Management
Airlie Funds Management For personal use only Led by John Sevior, Matt Williams and Emma Fisher, Airlie is backed by an experienced and trusted team Institutional >$9bn in FUM business Deep and multi-decade long relationships Airlie Australian Share Fund (ASX: AASF) managed by Matt Williams and Emma
Slide 24: Airlie Australian Share Fund
Airlie Australian Share Fund For personal use only S&P/ASX 200 Accumulation Airlie Australian Share Fund Index 1 year 38.3% 30.6% 3 years (% p.a.) 13.6% 9.7% Since inception (% p.a.) 13.8% 10.2% As at 30 September 2021 Magellan| 13
Slide 25: Sustainable strategies
Sustainable strategies Two active strategies with differentiated approach to sustainable investing For personal use only ~$500 million in FUM, more than doubled in last 12 months Managed by Dom Giuliano and Alan Pullen Now with over 4-year track records Recently awarded new institutional mandates, w
Slide 26: MFG Core Series
MFG Core Series For personal use only MFG Core MFG Core MFG Core ESG International Infrastructure Managed by Vihari Ross Managed by Elisa Di Marco Managed by David Costello Actively constructed, systematically managed and continuously monitored fully invested portfolios of 70-100 stocks Attractively
Slide 27: Magellan FuturePay
Magellan FuturePay For personal use only Extremely large market opportunity… Projected Post-Retirement Assets1 Retirees aim to achieve 3 key goals… ~A$2.0 trillion ~A$500 billion Regular, Capital Access to stable income growth capital 2019 2038 …which are connected and conflict with each other ….but
Slide 28: Magellan FuturePay
Magellan FuturePay FuturePay is an actively managed fund that aims to deliver: For personal use only A predictable monthly Driven by returns and capital Underpinned by a Together with daily income that grows growth, with a focus on reserving strategy and access to your with inflation downside protec
Slide 29: Magellan Capital Partners
For personal use only Magellan Capital Partners Magellan| 18
Slide 30: Magellan Capital Partners
Magellan Capital Partners For personal use only • Established for strategic balance sheet investments • Require strong prospects of generating high financial returns • Scope to enhance intellectual capital, diversification, optionality • Strong and capable management teams • Magellan Capital Partner
Slide 31: FinClear
FinClear For personal use only Investment Amount Invested A$23 million Shareholding ~15% fully diluted • Strong growth, both organically and by acquisition • Expanding HIN platform • ~250 wholesale intermediary clients and >300,000 active end client Business Update accounts • Focused on opportunitie
Slide 32: Guzman Y Gomez
Guzman Y Gomez For personal use only Investment Amount Invested A$103 million Shareholding ~12% fully diluted • Significant brand • Well established long-term plan for restaurant roll outs including drive-thru Business Update • Meaningful progress on US opportunities • Investing in growth, profitabl
Slide 33: Barrenjoey Capital Partners
Barrenjoey Capital Partners For personal use only Investment Amount Invested A$156 million Shareholding 40% non-dilutive economic stake (5% voting) • Unconstrained mandate, initial focus on 4 key business lines • Successful launch, with business lines progressively going live Business Update • Profi
Slide 34: Summary
For personal use only Summary Magellan| 23
Slide 35: Summary
Summary For personal use only • Core asset management business of scale with a diverse client base • Clear areas of growth, each serving client needs • Magellan Capital Partners performing well, Associates P&L positive for 1Q FY22 • Navigated through COVID-19 with staff safe and engaged Magellan is
Slide 36: Important Information
Important Information This presentation has been prepared by Magellan Financial Group Limited ACN 108 437 592 (‘Magellan’). This presentation contains summary information about Magellan and its related bodies corporate and is current as at 21 October 2021. While the information in this presentation
Slide 37: Important Information
Important Information The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating referred to in this document is limited to “General Advice” (s766B Corporations Act 2001). This advice has been prepared without taking into account the objectives, financial situation or
Slide 38: For personal use only
For personal use only www.magellangroup.com.au Phone: +61 2 9235 4888
Magellan Financial Group — Shareholder Meeting (October 2021) on 6ix