The Australian Magellan Financial Group is under severe pressure.

Co-founder Hamish Douglass has gone into defense mode.

The Sydney-listed asset manager's share price fell 33 percent on Monday.

With a closing price of 19.75 Australian dollars, it went below the mark of 20 dollars for the first time since February 2016.

As a result, the market value fell by almost 2 billion Australian dollars on Monday alone.

Previously, the wealth manager St James's Place had withdrawn the Australians the mandate worth 23.3 billion Australian dollars (14.77 billion euros).

The British move to Boston-based State Street Global Advisors.

Christoph Hein

Business correspondent for South Asia / Pacific based in Singapore.

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Douglass wrote to his employees, many of whom hold shares and options in the company, on Monday morning: "Even after the loss of SJP, we have a very strong business that is very well diversified." The Australian Financial Review quoted him: "Ours largest customer only accounts for around 3 percent of our sales.

We have more than 150 institutional relationships around the world with thousands of financial advisors. ”The SJP mandate, however, made up 12 percent of the business.

Disappointed with the sustainability

Now there is fear that other large investors could follow the Londoners. “Further disposals and price pressure remain a risk,” warn the analysts at Bank Macquarie in Sydney. However, the SJP had already put the Australians under surveillance in March; the Londoners cited unfulfilled expectations in terms of sustainability as the reason. The investment bank Jarden cut its price target for the share from 36 to 24.10 Australian dollars - which made buying the paper on Monday seem like good business. Morningstar analysts said they are currently maintaining their globally respected rating of Magellan's ETF, but will subject the company to a regular review next spring.

In the past few weeks, the problems had grown: First it became known that billionaire Douglass, who holds 12 percent of the company, and his wife separated after 30 years. This dealt with the fear that he could become so emotionally stressed that the investment management would hardly pay any attention. It is also open how many shares belong to his wife. The rumors had already spread when the long-time CEO Brett Cairns surprisingly announced his departure from the company "for personal reasons". He has just been replaced by Kirsten Morton.

"While both the departure of the CEO and the loss of the mandate will have a significant impact on the listed parent company Magellan Financial Group, the implications for the management of Magellan's underlying investment strategies are likely to be limited," says Morningstar. “There were no changes in the investment team. The lost institutional mandate was a separate account and it was not invested in a pooled vehicle. Still, the clash of business problems is an unwelcome distraction, especially given the recent problems with results. "

The best-known fund of the company, the Magellan Global Fund, founded by Douglass and Chris Mackay in 2007, last lagged the global share index MSCI World by 14.5 percent over the period of one year.

That followed ten years in which the fund had outperformed, inflating Magellan's fund portfolio to more than A $ 100 billion.