Magellan Financial posts revenue surge GLOBAL equities fund manager Magellan Financial, founded by former investment bankers Chris Mackay and Hamish Douglass, has posted a stellar windfall in the second half, with performance fees surging four-fold after a number of portfolios beat the market. Magellan today said it was entitled to fees of $23.1 million in the six months to June 30, compared to $5.8m in the prior half. It boosted performance fee revenue for the year to June 30 to about $28.9m, up from $9.1m the prior year. By early afternoon, Magellan shares were up more than 10 per cent to $10.75. Mr Mackay, a former chief executive and chairman of UBS Australia, set up Magellan in 2006 with Mr Douglass, who formerly spearheaded mergers and acquisitions for Deutsche Bank. Both are on annual fixed salaries of $1.25m. Magellan today said its funds under management surged to $14.7 billion at June 30, up from $12.9bn at May 31. Magellan invests in global equities for high net worth, retail investors and institutional investors. Institutional money makes up the bulk, with retail funds at $4.5bn. Magellan is in somewhat of a sweet spot, with the Australian dollar on the slide and offshore equity markets outperforming Australia. US equities traded around record highs during the recent half. UBS strategist David Cassidy today said the Australian market had underperformed this year due to the drag from resources. "At 13 times, the global price to earnings multiple is low compared to its own history over the last 10 or 20 years, and looks particularly compelling compared to the yields available on government and corporate bonds," he said. JPMorgan analyst Russell Gill last month told clients Magellan was receiving an "additional kick" as the Australian dollar fell against all major international currencies, with its funds generally having unhedged positions. "Across the listed fund managers in Australia, Magellan remains preferred exposure given the expectation of continued FUM flows across both the retail and institutional channels and exposure to asset classes with less structural headwinds than listed competitors," he said.