I have held MFG for a few years. However, In summary I do think these factors contributed to their underperformance at least from retail perspective:
There strategy around stocks like Alibaba and Tencent whilst sound, clearly underestimated their risks. They are companies registered as depositary receipts in Cayman islands with the "promise" of recognition of their parent companies accounts. How is an auditor supposed to have access to the same information as they do have with an American equivalent ?
The disappearance of Jack Ma and the botched IPO of antpay
The rise of ETFs, being relatively low cost options, Magellan LICs trading at sustained discounts to their NAV. They have tried to ameliorate this by creating closed class unit however I believe their fees will have to drop.
The gossip channels around Brett and Hamish, Hamish's wife, his 3 month vacation in Greece, St James place and minimal/reactive explanations of these concerns lead me to be concerned about the next year or so.
I have attended their investor presentations of the last few years and listen to their podcast and whilst they are entertaining and worth listening their explanations sometimes border on hubris for example their when they discuss epidemiology/virology.
We all wait for the adequacy of the Monday announcement.
Todays AFR article ‘Day of Reckoning for Magellan’s Hamish Douglass’ was rather scathing of Magellan’s recent underperformance. However, the article went on to include co-founder Chris Mackay’s viewpoint on Magellan and Hamish Douglass:
“Chris Mackay, the Magellan co-founder who for years has let Douglass run the show after stepping back amid rumours of a rift, was at Magellan’s Christmas drinks in Sydney’s Botanical Gardens on Thursday night. And, rarely, Mackay has spoken publicly about his support for the company and Douglass.
“Many underestimate the quality, resilience and breadth of Magellan’s business, their growth potential and the first-rate capabilities and determination of the teams, including Hamish and [interim CEO] Kirsten Morton,” he told AFR Weekend.
“When market cycles inevitably change, Magellan’s client-first focus should be more valuable.”
Disc: shares held IRL