Magellan Financial Group (ASX: MFG) has reported impressive full-year results for FY25, highlighting its successful transformation into a diversified financial services group. The investment management giant posted operating profit of $159.7 million, up 5.4% on FY24, demonstrating resilience in a challenging market environment.
Assets Under Management Reaches New Heights
The Sydney-based firm achieved significant growth in its core business, with assets under management (AUM) climbing 8.2% to $39.6 billion as at 30 June 2025. This growth was primarily driven by strong investment performance across all fund strategies, with all funds delivering double-digit returns for the 12 months to 30 June 2025.
CEO Sophia Rahmani, who was formally appointed in March 2025, emphasised the company’s strategic evolution during the results presentation. “We’ve carefully considered industry dynamics and positioned our business accordingly to benefit from structural changes reshaping the investment management landscape,” Rahmani stated.
The company’s diversified approach paid dividends, with strategic partnership income surging 202% to $31.1 million, now representing 20% of total operating profit. This marks a significant shift from traditional fund management towards a more diversified earnings model.
Investment Performance Drives Client Confidence
Magellan’s investment teams delivered standout performance across multiple asset classes. The Magellan Global Fund achieved 15.55% returns over the year, continuing to beat its stated objective of delivering absolute returns of 9% net of fees. Similarly, the Global Listed Infrastructure funds showed improved performance, with the flagship fund delivering 20.02% absolute returns.
The Australian equities strategy, managed through Airlie Funds Management, maintained its strong track record with the Airlie Australian Share Fund outperforming its benchmark by 1% since inception. New systematic equity funds, distributed through the partnership with Vinva Investment Management, also delivered top-quartile performance.
Despite strong performance, Investment Management revenue declined 12% to $245.7 million due to a reduction in average management fees and lower performance fees. This reflects the ongoing industry trend towards lower-cost investment solutions and the impact of fund composition changes.
Strategic Partnerships Drive Diversification
Magellan’s strategic partnership portfolio proved to be a key growth driver in FY25. The company’s investment in Barrenjoey Capital Partners delivered strong returns, with the investment bank recording a 24% increase in revenue combined with operational cost leverage, lifting NPAT to $59.4 million.
The partnership with Vinva Investment Management, established in August 2024, also exceeded expectations. Four Vinva funds are now distributed to retail clients by MFG, with $1.7 billion in AUM in systematic equity funds as at 30 June 2025.
Indexed AUM Growth by Strategy Over Last Two Years
FinClear Holdings, the company’s third strategic partner, continued its growth trajectory with contract note volumes growing 30% year-on-year and revenue increasing 8%. The successful launch of the FCX platform marks a significant milestone in private market innovation.
Strong Capital Position and Shareholder Returns
Magellan maintained its commitment to returning capital to shareholders, with dividends per share of 73.3 cents, up 12.6% on FY24. The company completed $74 million in on-market share buybacks during the year, bringing total returns to shareholders to $202.1 million.
The company’s balance sheet remains robust, with $563 million in liquid capital comprising cash and fund investments with no debt. This strong financial position provides flexibility for future growth initiatives and potential additional strategic partnerships.
Market Outlook and Future Strategy
Looking ahead, Rahmani identified four key industry trends that could benefit Magellan: fundamental transformation from product-centric to service-oriented industry, industry consolidation, active-to-passive flow stabilisation, and structural shift towards alternatives.
The company’s FY26 priorities focus on leveraging its global distribution platform, expanding client solutions, and evaluating new strategic partnership opportunities. Magellan’s emphasis on operational excellence and investment in AI technology positions it well for continued growth.
With strong fundamentals, a diversified earnings base, and improving investment performance, Magellan Financial Group appears well-positioned to capitalise on evolving market conditions. The successful integration of strategic partnerships demonstrates the company’s ability to adapt and thrive in a competitive investment management landscape.
