Douglass speaks out: 'We've never sold a single share in Magellan'

Could this drive the Magellan share price today?

| More on:
a business person sits at a boardroom table with a sad and apologetic look on his face with empty chairs around him and papers on the desk in front of him.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Magellan Financial Group Ltd (ASX: MFG) share price is on watch this morning amid reports emerging of the company's founder and chair, Hamish Douglass' response to intense rumours.

Douglass has hit back at media scrutiny facing both himself and the company this week, with his response hitting headlines at yesterday's close.

It followed reports by the press stating that his separation from his wife might cause the company financial harm.

He also addressed the major issue likely concerning investors.

Magellan was dropped by its largest client, St James's Place on Monday. The UK wealth management business' account previously made up 12% of Magellan's revenue. Its share price tumbled 32.9% as a result.

As of yesterday's close, the Magellan share price is $19.93. That's 3% lower than it was at the end of Tuesday's session.

Let's take a closer look at Douglass' response to media reports on Magellan's recent struggles.

Magellan share price in focus amid Douglass' response

The Magellan share price is in focus on Thursday after Douglass appeared in an interview to address circulating rumours.

Douglass said suggestions he or his wife, Alexandra, would "dump" shares in the company as a result of their separation were "absurd".  

Douglass said, "we've never sold a single share in Magellan" and "there's a time when people should really stay out of people's personal lives". He noted:

People have tried to create an image that my wife and I are in some nasty divorce. Nothing could be further from the truth.

Douglass also spoke on the loss of the major mandate the company previously had with St James's Place.

He said he's "disappointed" by the loss of the St James's Place account. However, he assured shareholders and investors it won't majorly impact the company. Douglass continued, saying:

Their mandate was a different mandate in global equity. it was a very bespoke mandate…

Their decision to withdraw doesn't have an impact on any other clients and importantly, it doesn't have that larger impact on our business… We will still have some of the highest operating margins of any fund management business in the world, with very substantial cash flow.

The loss of St James's Place's account will likely have a 6% impact on the company's financial year 2022 revenue.

The challenges currently facing Magellan come just weeks after the company's long-term CEO, Dr Brett Cairns resigned.

Yesterday, reports emerged that Cairns stepped down due to clashes with the company's board and Douglass. The company reportedly denied any such fallout occurred.

This week's fall has added to the woes the Magellan share price has faced on the ASX lately. Right now, the company's stock is trading for 62% less than it was at the start of 2021.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Financial Shares

A green-caped superhero reveals their identity with a big dollar sign on their chest.
Financial Shares

Own Soul Patts shares? Here's its latest investment for diversification

The company has added further energy exposure to its portfolio.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

2 rising ASX financial shares with 'meaningful upside' still left: fundie

Financials outperformed every other sector in FY25, but there are still buying opportunities left, say these experts.

Read more »

Frustrated and shocked business woman reading bad news online from phone.
Financial Shares

Macquarie shares sink 5% on Q1 update

The investment bank is having a tough start to the year.

Read more »

A man holds his baby on his lap at the dining room table while he looks at his laptop screen earnestly.
Financial Shares

After its result, does Macquarie rate AMP shares a buy, hold or sell?

The financial services company released a strong second-quarter update on Monday.

Read more »

A blockchain investor sits at his desk with a laptop computer open and a phone checking information from a booklet in a home office setting.
Broker Notes

Are non-bank lenders a lucrative alternative to the big 4 banks?

The big 4 banks are widely perceived as being fully valued or overvalued.

Read more »

Red sell button on an Apple keyboard.
Financial Shares

ASX 200 financials was the best sector of FY25. But it's time to sell these 2 stocks, say experts

The ASX 200 financials sector gave investors a near-30% total return in the 2025 financial year.

Read more »

Happy woman working on a laptop.
Financial Shares

AMP share price jumps on strong Q2 update

Let's see what the financial services company reported for the quarter.

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Financial Shares

The pros and cons of buying IAG shares this month

Is this the right time to invest in the insurance giant?

Read more »