When it comes to ASX fund managers, none has been more prominent than Magellan Financial Group Ltd (ASX: MFG) over the past few years. Before 2020, the talk would have been rather positive, one would guess. That's because the Magellan share price rose more than 200% between December 2016 and February 2020.
But the past two or so years have been the exact opposite. Questions over the company's direction, as well as creeping underperformance in its flagship Global Fund, have weighed heavily on investors' minds since the onset of the pandemic. More recently, speculation regarding Magellan boss Hamish Douglass' personal life, as well as the abrupt departure of its CEO Brett Cairns, seem to have further dented confidence.
Magellan shares are now down more than 45% year to date in 2021, as well as more than 60% from their 2020 peak of more than $70 a share. Today, the Magellan share price is sitting at $28.99 at the time of writing, down 3.01% for the day so far.
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Perpetual throws down the gauntlet
Perhaps today's sell-off is related to one of Magellan's peers and rivals. Perpetual Ltd (ASX: PPT) shares are faring far better today. They are holding their ground at the time of writing at $35.44 a share, doing far better than Magellan. This could be related to the company's announcement yesterday before market open.
Yesterday, Perpetual released the presentation for its Investor Day held last week. And it makes for some interesting reading (and viewing). Here, Perpetual outlined its vision going forward, and it seems Magellan is firmly in the company's sights. Here's some of what Perpetual CEO Rob Adams said during the presentation:
Over the last 25 years in the Australian retail marketplace…there's been three dominant winners in global equities. And each had dominance for around 8 or 9 years. It was Kerr Neilson at BT, then it was Kerr Neilson at Platinum, then it's been the team at Magellan… I want to position us to be the next winner.
We are a competitor to Magellan… It's important that we show strong outperformance, we are, and some of our competitors happen to be not performing well then that increases the opportunity for us.
In addition to these visionary statements, Perpetual also highlights its $101 billion (as of 30 September) of assets under management, which indeed is creeping closer to Magellan's current $116 billion. That's up significantly from the $28 billion Perpetual recorded in FY2020. No doubt helped by the acquisitions of Trillium Asset Management and Barrow Hanley over the past two years.
How does Magellan measure up?
So it remains to be seen whether Perpetual can overtake Magellan as a "dominant winner" of the ASX fund manager space. But now you know what the company is aiming for.
At the current Perpetual share price, this fund manager has a market capitalisation of $2.01 billion. It also commands a price-to-earnings (P/E) ratio of 26.8 and a dividend yield of 5.08%. In contrast, Magellan Financial Group currently trades with a market cap of $5.4 billion, a P/E ratio of 20.12 and a dividend yield of 7.26%.
