Listed funds management company Magellan Financial Group (MFG) has announced this morning that it will buy Airlie Funds Management — the company founded by famous stock picker John Sevior.
MFG will also buy US-based fund manager Frontier Partners Group, in a combined deal worth around $140 million — comprised of $15 million cash and 4.6 million MFG shares.
Airlie has around $6 billion under management and was founded in 2012 by Sevior and David Cooper, with Matt Williams — the former head of equities at Perpetual — joining the company in 2016.
“The acquisition brings together two of Australia’s leading funds management businesses. We have known the Airlie team for many years and consider both John Sevior and Matt Williams to be among the most respected portfolio managers in Australian equities,” said Hamish Douglass, Magellan’s co-founder and CEO.
The acquisition was announced as part of Magellan’s half-year financial results this morning.
MFG reported net profit after tax of $53.5 million for the six months to 31 December 2017, a decline of 39% from the previous year.
The decline was largely due to one-off expenses of $55.7 million associated with the initial public offering of the Magellan Global Trust.
The Airlie transaction “will be funded via the issuance of Magellan shares to Airlie shareholders. Airlie will become a wholly owned subsidiary of Magellan and will continue to operate under the Airlie brand”, MFG said in its half-year report.
The acquisition is expected to be completed by 28 February 2018, after which the combined entities plan to launch the Airlie Industrial Share Fund — an exchange traded fund quoted on the ASX.
“We have found a long-term partner in Magellan and see strong alignment in our respective cultures and philosophies,” Sevior said as part of the announcement.
“Our clients will benefit from the operational and business support that Airlie will access through this partnership and, whilst we remain ever-focused on our clients, the Airlie Industrial Share Fund provides the opportunity to add diversity to our business and career development for our staff.”
A short time ago, Magellan shares were down more than 5% in early trade: