Magellan Financial Group Ltd.’s chief executive said its merger with Barrenjoey Capital Partners will allow the Australian firm to provide its customers with more offerings in private markets.
The deal is on track to close around the middle of this year and “absolutely makes us stronger for the future,” Sophia Rahmani said at the Bloomberg Forum for Investment Managers in Sydney on Tuesday. “It will help us be able to provide more to our clients around private markets and lots more things.”
Magellan agreed in March to buy Barrenjoey in a deal valued at around A$1.62 billion ($1.2 billion). Since opening in 2020, Sydney-based Barrenjoey has expanded to more than 400 employees and now spans corporate and strategic advisory work, capital markets underwriting and research.
Since joining two years ago, Rahmani has been spearheading a turnaround strategy at Magellan, which has traditionally been known for its global equities and infrastructure funds. It had struggled after co-founder Hamish Douglass left in 2022 and assets under management slumped from A$100 billion at their peak in 2021. Magellan managed around A$37 billion as of March.
While there remains appeal for private markets — assets and companies not traded on public exchanges, such as private equity, venture capital and private credit — regulators are ramping up surveillance and supervision in Australia.
Private credit giants have been grappling with increased investor scrutiny of the $1.8 trillion industry’s lending practices and exposure to businesses vulnerable to artificial intelligence. A flurry of withdrawal requests has fueled questions about whether direct lending is suitable for investors who want greater liquidity.
Speaking at the same forum, Jacqueline Fernley, founding partner and CEO at Arc Point OCIO Pty, underscored the need for private market investments. Her firm handles the chief investment officer function for wealthy clients.
“The key message is to make sure you actually understand what you own in the space and make sure your portfolio is appropriately diversified,” she said. “Not all private credit is bad, and so it definitely has a role in a portfolio.”
Also speaking at the event, Aware Super CIO Simon Warner said the A$200 billion pension’s private credit portfolio “will grow over time as we see more people move into retirement.”
“You have to be clear about what you own and we are comfortable with what we own,” Warner said. “We think there are pockets of stress, but probably not enough to get a system-wide shock.”
Written by: Richard Henderson and Adam Haigh @Bloomberg
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