But a month after Sevior announced his decision to quit, the damage has become graphically clear. Mandates from institutional clients have taken a hit. The $9 billion of funds under management the Australian equities division boasted only last month has fallen to $6 billion, with superannuation fund HESTA and at least one other client yanking funds. There could be more damage down the track as institutional investors regularly review mandates.

The hit to the Australian division has dragged Magellan’s total funds under management down to $43.2 billion – a significant fall from its peak in fiscal 2021 of $118 billion.

Where Douglass used a more public stage with thousands of smaller investors and media appearances to preach his investment gospel, Sevior garnered support among the financial services industry. Where Douglass fed off the adulation of the masses, Sevior was always less conspicuous.

Sevior was particularly prominent in the funds management industry, having built relationships over 30 years.

After years running the highly successful Australian equities team at Perpetual, Sevior started his own funds management business called Airlie, which was subsequently acquired by Magellan in 2018.

But unlike Magellan’s larger global business, the Australian team had a textbook succession plan, with Sevior’s long-time colleague Matt Williams moving into the role. But relationships matter and some of these clients had been dealing with Sevior for more than 20 years.

Additionally, Sevior’s departure was probably a pivot point for some larger clients who are joining the wider industry trend of managing investment funds in-house and are de-risking their investment decisions by hugging the index rather than actively picking stocks.

Magellan is still working on the stabilisation of funds more than a year after Douglass’ spectacular departure while swimming against this broader industry tide.

It parachuted in Future Fund alumni David George to run the group last year. His low-key management style was designed to contrast that of Douglass.

While George is well respected in the industry, insiders suggest he has spent much of the past year putting out small fires and plugging holes.

Magellan is now attempting to pitch itself as a team player, not a one or two-man band. But it needs a couple of years of outperformance under its belt before client money will begin to flow back.

Until then, the best that can be hoped for is to tread water.

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