Whoops! If only it were trading at $28.15 ;) Fixed now! Thanks for picking that up Bear!

No worries Rick - I've deleted my post since you've corrected that price. Don't forget however that MFG was trading at over $30/share before their CEO quit, and were still at over $29/share before the announcement of the loss of the St James's Place mandate. Then they were still trading at over $21/share before the December quarter and December half FUM and fees announcement on January 7th.

MFG closed at $18.51 on the trading day immediately prior to the announcement that Hamish was taking medical leave, and they have recovered back to almost that level from the $16.14 low they got down to on the 7th, but I would argue that Hamish taking medical leave is probably the most thesis-breaking event of them all so far. My own investment thesis (when I held MFG shares) centred around Hamish's brilliance and his ability to turn around this recent 18 months of underperformance and by doing so begin to attract FUM back into the various funds that MFG manage. The largest risk to that thesis was key man risk, i.e. something happening to Hamish or Hamish stepping away from the PM and CIO roles at Magellan, and that's exactly what has just happened. And we do not know how long for either.

At below $15/share I could possibly put together a different investment thesis for MFG, but without Hamish at the helm MFG is a very different proposition.

I'm tempted, but I think it will go lower first. :P

I think the risk there TFG is that MFG lower their dividend. Or possibly even suspend their dividends payments.

The reasons they may do this are:

1. Recent underperformance vs. their benchmark, so lower fees earned by the management company (MFG), so less income to distribute.
2. FUM dropping, including the loss of their largest institutional client, so less fees for the management company (MFG), so less income to distribute.
3. Much higher expenditure in the past 12 months, including the establishment of Barrenjoey, the costs associated with the restructure of MGF (which were all borne by MFG), new fund launches (with all costs absorbed by MFG), bonus ("loyalty") units issued to MGF unitholders, with the costs covered by MFG.
4. With Hamish having taken medical leave, and Chris Mackay now stepping in, Chris has a much more prudent and careful (measured, deliberate, conservative) style than Hamish, which can be seen in what his own fund (MFF) holds:

From MFF's January 2022 report:

So we have some overlap there, with MFF now holding Amazon, Alphabet, Meta Platforms (Facebook) and Microsoft, and Chris has been invested in Visa and Mastercard, like, forever. However, you'll also see a lot of more traditional banking stocks there, and more traditional healthcare stocks.

MFG have stated that it's business as usual at MFG and that the style of investing won't change while Chris is looking after the company in Hamish's absence. So, I'm not expecting any major changes with what MFG's various funds invest in, however it is very possible that Chris and the team will take a more prudent approach to what dividends are paid by the management company in the light of my first 3 points above.

Hamish Douglass and Chris Mackay some years back not too long after they formed Magellan Financial Group (MFG) together. Source: The Australian newspaper.

I note Hamish still had hair back then.

Fair points there TFG, however the outlook for MFG back in 2015 looked a hell of a lot better than it does now for MFG, in my opinion. They had Hamish at the helm, and he was flying. They are a much larger business now, but the value drivers have completely changed, and they have significant headwinds now that really did not exist then. One of those is the rotation from growth to value globally. Another is that the NASDAQ has only had one decent leg down recently with many predicting one or two more because of rising interest rates. Another is trying to replicate the outperformance that Hamish was achieving in 2015 now that Hamish has taken medical leave.

Additional: For some context regarding the NASDAQ, Meta Platforms (Facebook) dropped by 26% one week ago partly because Zuckerberg said that Tik Tok and other apps were attracting more traffic. These huge tech players aren't really set-and-forget companies. I believe they still need active management - in terms of funds that invest in them watching the companies and market sentiment closely. In the current environment, I think we'll find that the market will jump on anything negative regarding a FAANG (now MAAAN) stock or other tech high-flyer and sell them down mercilessly. It's like the opposite of FOMO - fear of missing out on getting out at a higher level before a big correction. These companies aren't going broke, but they could certainly have share prices that halve or worse. NASDAQ stocks are going to get hit way harder than other stocks from a rotation from growth to value, which is now on.

While Chris Mackay and the team there at MFG - in Hamish's absence - have said it's business as usual - and there's no change to the strategy, the strategy was all Hamish's, so it will be interesting to see how they "Do a Hamish" with Magellan when Hamish isn't there. Nobody seemed to think quite like Hamish Douglass about global megatrends and longer term investing in those. I have a huge amount of respect and admiration for the guy.

The continued recovery in MFG's share price since Hamish announced his medical leave seems to suggest that the market may believe this is a circuit breaker than Magellan needs, and they could well be right, however MFG still need to get some runs on the board from here. They have been bleeding FUM, and underperforming their benchmark (MSCI) index for what is getting on towards two years now, and as a funds management company, MFG shareholders can only enjoy the fruits of their success, which usually is derived from fees earned.

MGF - the Magellan Global Fund - however is a different kettle of sardines altogether. I am invested in MGF. Just not MFG at this point. I sold MFG out of my SM portfolio on the day Hamish announced his medical leave, and I had sold them earlier IRL, as previously disclosed.

11-Feb-2022: MFG released their January FUM numbers today: MFG-Funds-Under-Management-Update.PDF

As at 9 February 2022 (at the close of the US market), Magellan had funds under management of approximately $87.1 billion (compared with FUM of $93.5 billion as at 31 January 2022 and FUM of $95.5 billion at 31 December 2021). The change in FUM comprises market movements (including foreign exchange), cash distributions paid in January 2022, net outflows and notifications since 1 January 2022. 

Magellan has experienced net outflows (excluding cash distributions paid) of approximately $5.5 billion since 1 January 2022, which comprised net institutional outflows of $5.0 billion and net retail outflows of $0.5 billion. 

The FUM and net outflows above are unaudited and comprise amounts that have been or are being redeemed of $3.6 billion and amounts for which Magellan has received notification of intention to redeem (up to 9am on 11 February 2022) of $1.9 billion.

--- ends ---

MFG are currently down by around 70 cps at $18.35 or thereabouts (-3.7%), but they've been as low as $17.88/share this morning (which was -6.1% down from yesterday's $19.05 close).

MFG have a policy to pay out 90-95% of NPAT, so the question is what is NPAT after all these outflows.

Dividend Schedule & Policy - Magellan Financial Group (magellangroup.com.au)

It will be interesting to see if they can uphold this policy given the raft of issues that have arisen recently. The other thing to consider is that most of these impacts will affect their H2 FY22 numbers rather than H1, and the report they are about to release is on H1.

MFG paid their interim dividend on Feb 25^th last year (2021) and on Feb 27^th the year before (2020), so they're running out of time to report and declare a Feb interim dividend, as it's already the afternoon of Feb 11, and unless they release their report after-market-close tonight, their next opportunity is Monday 14th. Last year they reported on Feb 11th, and in 2020 they reported their H1 results on Feb 13th.  So they are due to report.

If their report and dividend disappoints next week, I think $15/share is achievable. It's not going to feel good for those that are still holding, but I would imagine that should be the bottom, if they get there, or very close to it, and there will be gradual upside from there, unless they keep bleeding FUM. I would be tempted to get back in at $15, but I'd like to see a sustained uptrend emerge really before jumping back on board, and I can't have it both ways. I can try to pick the bottom (and I don't think we're there yet) OR I can wait for an uptrend to become established, but I can NOT do both, ...unless I buy twice.

It still looks to me like they are going lower from here.

Edit: Additional: MFG are going to report next Friday - 18-Feb-2022 - see here.

A 6 billion drop in just 9 days is nasty. A combination of market and outflows I guess.

Very interesting that it says from 1st Jan 5 bil outflows institutional outflows, but only 500 mil retail.