OPINION: Sandon Capital says its push to restore value at Magellan is based on a return to the things that made the fund manager great.
is built around restoring the thinking that turned Magellan into one of the country’s most successful fund managers.the spectacular departure of its talismanic leader Hamish Douglass
Sandon might own less than 1 per cent of Magellan as the 13th biggest shareholder, but it has form as a mouse that can roar, after being part of successful campaigns at Iluka, City Chic, Fleetwood Corporation and A2B. Sandon’s base case says that if Magellan’s funds management business can be valued at an enterprise-to-EBITDA multiple of closer to its peers at 6 times, rather than the 2 times it trades at today, the stock could be worth $11.79, compared to Monday’s close of $8.60; its bull case values the group at $15.29.
For example, George himself is focused on fixing performance in the global equity fund in a way Radzyminski says is more attuned with the investment philosophy Douglass espoused way back in Magellan’s 2007 annual report: buy outstanding companies – defined as “those that have sustainable competitive advantages which translate into returns on capital materially in excess of their cost of capital for a sustained period of time” – at attractive prices, regardless of how they fall into traditional...
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