In its full-year results released on the ASX on Wednesday, Magellan Financial Group reported a 2 per cent rise in adjusted net profit after tax (NPAT) to $177.9 million.

Statutory NPAT was reported to have risen 31 percent to $238.8 million, while profit before tax and performance fees for Magellan’s funds management business fell 25 percent to $158.3 million.

“Magellan made significant progress in FY24, restoring stability to our business and laying the foundations for future growth,” said Magellan’s executive chairman, Andrew Formica.

"Our financial results reflect the resilience of our business after several challenging years."

Average funds under management (FUM) in FY 2024 were $36.8 billion, down 25 percent from FY 2023 when the figure was $48.8 billion.

Magellan had $36.6 billion in FUM as of June 30 – made up of $17.1 billion in retail assets and $19.4 billion in institutional assets – across its three investment strategies, with Formica adding that this grew to $38.4 billion at the end of July.

Within the aforementioned strategies, global equities saw outflows of around $5.7 billion during the year, with $3.2 billion originating from the institutional channel.

Infrastructure, meanwhile, saw new outflows of about $500 million, while Airlie reported a net inflow of $300 million for the period.

However, the firm said quarterly net retail outflows continued to show signs of improvement, while the firm had its first positive quarter of net institutional inflows in more than two years in the fourth quarter of the 2023-24 financial year.

“Net flows continued to stabilize in both the retail and institutional channels and we delivered significant customer gains. It is particularly pleasing to see a return to the institutional channel, demonstrating the confidence that new and existing clients retain in Magellan,” said Formica.

The execution of its investment strategies generated $19.2 million in performance fees, the highest level since FY20-21, and fund management operating expenses were down 16 percent from FY22-23 to $102.4 million dollar.

"Importantly, we have addressed several legacy issues that have helped restore stability to the business and set us up for future success."

"These include the successful implementation of transitional management arrangements, the authorization of employee share purchase plan loans for our staff and the introduction of a new remuneration framework, as well as the conversion of the Magellan Global Fund's closed-end class to an open-end class."

Looking ahead, Formica said the group is now focused on its strategic goals and growth.

Magellan Inks Deal

Also Wednesday, Magellan announced a strategic partnership with $22 billion fund manager Vinva Investment Management, an active specialist in systemic equity strategies.

As part of the partnership, Magellan acquired a 29.5 percent equity interest in Vinva's parent company, Vinva Holdings Limited, and will distribute Vinva's products and investment strategies through its global distribution team as part of an exclusive distribution agreement, except for Australian institutional clients, where Vinva will maintain its focus.

Magellan said it also intended to collaborate on new product initiatives in Australia and globally.

“While there is still work to be done, our financial position is strong, we consistently generate stable operating cash flows and are very profitable.

"This resilience and strength allows us to continue to pay attractive dividends to shareholders while investing in the future." Our progress over the past year has been encouraging and we are actively positioning the business to deliver positive results for both customers and shareholders,” Formica said.

Magellan's board declared dividends of 35.7 cents per share, including a final dividend of 28.6 cents per share and a performance fee dividend of 7.1 cents per share.