ASX 200 (XJO) down, Magellan (ASX:MFG) reveals investment

The ASX 200 (ASX: XJO) is currently down 0.14%, though it has been up slightly a couple of times this morning.

Magellan Financial Group Ltd (ASX: MFG)

Magellan has announced a large investment into new financial services firm Barrenjoey Capital Partners.

Barrenjoey is a newly established Australian-based full-service financial services business.

For Australian and international clients, it will provide corporate and strategic advice, equity and debt capital market underwritings, cash equities, research, prime brokerage and traditional fixed income services.

Barrenjoey will have Guy Fowler as Executive Chairman and Brian Benari as CEO. Other founding partners will be John Cincotta, Matt Hanning and Chris Williams.

Magellan also said that Ken MacKenzie will also join in early 2021 as a senior strategy partner to provide strategic advice and senior counsel, CEOs, chairpersons, boards, executive teams and business owners to develop and execute their long term strategies.

Magellan’s investment comprises the issue of approximately 1.2 million Magellan shares and $90 million of cash to take a 40% economic stake in Barrenjoey. Magellan has a 4.99% voting interest and Magellan’s CEO, Brett Cairns, will join the Barrenjoey board.

The funds management business will also provide Barrenjoey with a $50 million working capital facility to support the growth of the business.

Magellan will have no day-to-day operational involvement in Barrenjoey. The investment will form part of Magellan’s ‘Principal Investments’ business.

Global banking giant Barclays is also involved with a $45 million with a 9.99% economic stake and a 4.99% voting interest. Barclays has also entered into an agreement with Barrenjoey covering global product distribution, research, cross border advisory and debt capital markets and has made available additional regulatory capital and significant balance sheet capacity for the new company.

Magellan CEO Brett Cairns said: “We believe the partnership model that leaves control, equity ownership and core decision making with the executives is proven and powerful. This partnership model was adopted historically by many investment banks but unfortunately seems to have disappeared over the last 20 years.”

Harvey Norman Holdings Limited (ASX: HVN)

The retail business gave a trading update today.

Harvey Norman said that aggregated sales revenue for the period from 1 July 2020 to 17 September 2020 grew 30.6%.

In local currency terms, Australian franchisee sales grew by 33.8%, New Zealand sales grew by 21.9%, Slovenia and Croatia sales went up 26.4%, Ireland sales went up 60.7%, Northern Ireland sales rose 22.5%, Singapore sales climbed 0.3% and Malaysia sales grew 13.1%.

A new company-operated store was opened in Galway City in Ireland on 22 July 2020 and a new company-operated store in Seletar Mall in Singapore on 15 September 2020.

Unaudited preliminary profit before tax for July and August 2020 rose 185.8% to $178.1 million.

Other news

The team over at Rask Media have covered the rest of today’s news, so make sure you head over there for more ASX share market coverage.

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At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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