Magellan Financial Group reported a solid half-year performance with a 3% rise in assets under management and a 5% increase in operating earnings per share, driven by a surge in strategic partnership income.
- 3% growth in assets under management to $39.9 billion
- 5% increase in operating EPS to 48.6 cents
- Strategic partnership income more than doubled to $25.7 million
- Investment management revenue declined 17% due to fee pressure
- Strong capital position with $504 million liquid capital and no debt
Solid Half-Year Growth Despite Fee Pressures
Magellan Financial Group (MFG) has delivered a steady half-year result for the six months ending 31 December 2025, with assets under management (AUM) increasing by 3% to $39.9 billion. Operating earnings per share rose 5% to 48.6 cents, reflecting disciplined execution amid a challenging market environment for active managers.
While investment management revenue fell 17% to $106.9 million, primarily due to a reduction in average management fees and the absence of performance fees, the group’s diversified revenue streams helped maintain a flat operating profit of $83.1 million. This resilience underscores MFG’s strategic shift towards broadening income sources beyond traditional management fees.
Strategic Partnerships Fuel Income Growth
The standout feature of the half was the more than doubling of income from strategic partnerships to $25.7 million, driven by strong performances from Barrenjoey Capital Partners and Vinva Investment Management. Barrenjoey, with its expanding footprint across equities, fixed income, and capital markets, reported a 114% increase in net profit after tax, while Vinva’s systematic equity strategies attracted significant institutional and retail inflows.
These partnerships not only provide earnings diversification but also position MFG to capture growth opportunities in specialist financial services, complementing its core asset management business. The group received $17.8 million in fully franked dividends from these associates, highlighting the tangible benefits of its strategic investments.
Capital Management and Shareholder Returns
MFG’s balance sheet remains robust, with $504 million in liquid capital comprising cash and fund investments, and no debt. The group returned $105 million to shareholders in the half through dividends and an on-market share buy-back program, which saw $38.4 million deployed at an average price of $9.70 per share.
Management reaffirmed its commitment to disciplined capital allocation, balancing shareholder returns with strategic investments and operational efficiency. The company’s 50% increase in dividends per share to 39.5 cents reflects confidence in sustainable earnings and cash flow generation.
Looking Ahead – Strategic Priorities and Market Positioning
Magellan is focused on leveraging its global distribution platform to deepen client relationships across Australia, North America, Asia Pacific, and Europe. The firm continues to invest in technology, including AI and automation, to enhance operational excellence and support scalable growth.
With a rebranded US business under the Magellan Investment Partners banner and ongoing adviser engagement initiatives, MFG aims to strengthen its market presence and product offering. The group also plans to evaluate new strategic partnership opportunities to further diversify income and drive long-term value creation.
Bottom Line?
Magellan’s diversified strategy and strong partnerships underpin a resilient outlook amid fee pressures and evolving market dynamics.
Questions in the middle?
- How will Magellan address ongoing fee compression in its core investment management business?
- What new strategic partnerships might MFG pursue to sustain income diversification?
- How will investments in AI and automation translate into operational efficiencies and cost savings?