Good morning, everyone. And on behalf of the company, welcome to the Magellan Financial Group Interim Results Conference Call for the Half Year Ended thirty one December twenty nineteen. I'm Sarah Thorne, and I lead investor relations at Magellan. The company's results will be presented today by the CEO of Magellan, Doctor. Brett Cairns and the Chief Financial Officer, Ms.
Kirsten Morton. Hamish Douglas, Magellan's Chairman and Chief Investment Officer, is also in the room today and will join the Q and A session at the end of the call. An investor presentation has been lodged with the ASX and is available on Magellan's website. We are not planning to step through the presentation on today's call. However, it is available for further information.
For those of you who have joined through the teleconference, the teleconference administrator will advise you at the end of the call how you can ask a question. And for those of you joining us via the webcast, you can submit a question by typing it directly into the webcast portal. Please note that today's call is being recorded, and we may also have media on the line today. Please note that some of the information you may hear during our discussion today may consist of forward looking statements regarding Magellan. No assurance is given that the future developments will be in accordance with Magellan's expectations.
Actual results could differ materially from those expected by Magellan. Thank you, and I will now hand over to Brett.
Thanks, Sarah, and good morning all, and welcome. Before discussing some business highlights, let me briefly touch upon a few financial highlights for the six months to the December 31. The percentage changes I'll refer to are relative to the corresponding six months in the previous year. The key driving number is a 29% increase in average funds under management, or FUM as we like to call it, to $92,800,000,000 This, in turn, drove a 27% increase in management fees for the half to just under $286,000,000 The slightly lower percentage increase in management fees reflects a small reduction in margin from the prior corresponding period due to a change in the mix of our thumb rather than any fee reductions. Statutory profit after tax was up 13% to $195,700,000 for the half.
And after adjusting for noncash items and costs relating to strategic initiatives, net profit after tax increased 23% to $216,800,000 We have previously discussed our thinking behind these adjustments. And rather than go over things again, I would point those interested to the interim report for a full explanation. When viewed on a per share basis, adjusted net profit rose at a slightly slower pace of 20%, primarily reflecting the additional shares issued as part of the institutional placement we conducted in August. Funds Management segment profit after tax increased 24% to $279,000,000 And without the impact of performance fees, it increased 30% to just over $237,000,000 This reflects both the increase in the average funds under management and indeed scalability, with the funds management cost increasing at a slower pace of 14% relative to revenues. In our other business segment, principal investments per share stood at $2.09 after allowing for tax on unrealized gains, a 14.5% increase since the June 30, also noting the increased number of shares on issue during that time.
We think each of these measures provides useful information and should be considered. And when viewed overall, we believe the business has had a solid six months and remains well positioned. The directors have declared an interim dividend of $0.09 $29 per share, which represents a 26% increase over the prior corresponding period. The slightly lower increase in dividends relative to the 30% increase in funds management segment profit before tax and performance fees reflects the increased number of shares on issue. As per our dividend policy, the dividend relating to crystallized performance fees after tax will be declared in August alongside our final dividend and therefore is not included in this interim dividend.
Crystallized performance fees before tax at 12/31/2019 stood at $41,700,000 Before handing over to our CFO, Kirsten Morton, allow me to make some additional comments regarding the business and strategy. Our business continues to operate satisfactorily, underpinned by strong investment performance delivered
over
the period by Hamish, Gerald, Ailey and indeed the entire investment team. We've spoken often of the importance we place on looking after our clients and achieving the stated objectives for each of our investment strategies, and nothing has changed. This is paramount. With funds under management of $97,500,000,000 at thirty one December, investment performance, both positive and negative, is a key contributor to changes in our firm, with net flows now tend to be more incremental in comparison. You can clearly see this in this half with GBP 7,800,000,000.0 growth in FUM coming from investment performance and net inflows contributing GBP 3,600,000,000.0.
Notwithstanding the focus we have on our existing clients, we do work on and think about other opportunities, But the hurdle is high as we consider these opportunities as we do not want to distract from what we are already doing. I noted this time last year that we were at various stages of several new product developments and that it was important that our offerings meet a need and help solve the problem. This takes time to
get it right, and it also requires patience and focus. We have made solid progress on a range of fronts in this regard, some of which we hope to be able to share more broadly soon. For example, after much discussion with a range of parties, we expect
to make the Airlie Australian share fund available on the ASX in coming weeks. We think this is a meaningful step, but it's not as it is not a new fund or a new class of units that will be issued on the ASX. Rather, the existing units of the currently unquoted fund will also be quoted for purchase or sale on the ASX. Importantly, this quotation will sit alongside the existing traditional application and redemption processes. Although this may appear to be a subtle enhancement, it effectively represents the convergence of listed and unlisted open ended funds into a single entity and single unit, and we believe this brings significant simplifications and other benefits to our clients as well as Magellan.
We intend to build on this approach to further simplify our funds over time. We have made further progress in developing a client solution for retirement income. Whilst there are still some issues to be fully resolved, our confidence is growing that we'll be able to launch the Magellan Retirement Fund before the end of the financial year. Our sustainable strategies have now passed their three year anniversary and are performing well, outpacing benchmarks. We intend to launch the global sustainable strategies of retail fund, utilizing the approach we have developed for Airlie towards the end of the calendar year.
Finally, we continue to assess and are making progress on a number of partnership initiatives, which we believe will strengthen the business over time. In this regard, we were very pleased with the launch of the Magellan High Conviction Trust, MHH as it's known, during the half. Investment performance since launch, coupled with the loyalty and foundation unit issuance in mid January this year, resulted has resulted in a good investor experience to date. Trading in units has shown excellent liquidity at prices generally at or very closely around the net asset value, and feedback has been positive as investors have utilized MHH to help build and diversify their portfolios. Before handing over to Kirsten, I would also like to touch upon another important part of our adviser and client engagement, and that is our upcoming investor events, which commence on the February 21.
Hamish and team will be visiting seven cities across Australia and New Zealand, discussing global markets and investments. Much work has gone into these events with the aim of producing insightful and relevant information for our investors and their advisers. These are large undertakings. Some 12,000 tickets have been purchased in aggregate. And if you are going, we're all looking forward to potentially meeting you at the cocktail reception that follows the presentations.
With that, let me now hand over to Kirsten to run through some of the financials.
Thank you, Greg. Magellan's had a strong first half with a net profit after tax of GBP 195,700,000.0, up 1313% compared to the prior corresponding. Included in that net profit are noncash items of amortization expense and unrealized net gains from our principal investments portfolio, along with one off transaction costs a very
We
meaningful performance information of our business. So after excluding these items, adjusted net profit after tax for the six months to December 31 rose 23% to $216,800,000 Diluted earnings per share was 108.2¢ per share and adjusted diluted earnings per share was 119.9¢ per share, which reflects a 20% increase from the prior corresponding period. As Brett mentioned earlier, the interim dividend for six months to thirty one December twenty nineteen is 92.9¢ per share, an increase of 26% on the 2019 interim dividend. This dividend reflects Magellan's dividend policy to pay out 90% to 95% on net profit under tax on the funds management business, excluding crystallized performance fees. The interim dividend is ranked at 75.
As we previously flagged, given our payout be partially franked. Our effective tax rate for the six months to thirty one December was 22.3%. And that continues to reflect the benefits of our offshore banking unit license. Now moving on to the financial results of our core operating business, funds management. Fund management revenue increased 22% to 333,900,000.0 for the six months of thirty one December nineteen.
And this increase reflects a 27% or 60,100,000.0 increase in management fees, crystallized performance fees before tax of 41,700,000.0. And as we have also previously planned, performance fees will fluctuate materially period to period. And service fees and advisory fees from our US distribution business Frontier, along with interest in other revenues, which together have increased modestly by 1,500,000. Expenses in the half year increased by 6,600,000.0 or 14% to 54,900,000.0. With the increase primarily resulting from higher employee expenses, up 17% to 36,200,000.0, and higher fund administration and operational costs, up 14 to 9.1.
Brett mentioned earlier that that some fund administration costs are variable and increased with higher funds under management. Employee expenses represented 66% of our overall funds management costs for the half year, and approximately half of the remaining expenses are variable in nature, either moving in line with changes in fund or being a function of the number of investors we have in our funds. The other half of the nonemployee expenses, we would describe as fixed in nature, such as occupancy costs or IT costs. The business has developed to has been developed to build scalability, which is reflected in the funds management cost to income ratio, which for the half year was 18.8%, improvement from 2.9% on the previous corresponding half. After including the positive benefit of performance fee revenue, the cost to income ratio reduced to 16.4%.
We expect that the funds management total expenses for the 2020 financial year to be at the top end of the 115,000,000 to $120,000,000 guidance range, which reflects in part expenses related to higher fund. Now turning briefly to capital management. The group maintains a stronger balance sheet with net capital assets of $890,000,000 At thirty one December twenty nineteen, investment assets, which comprises cash and cash equivalents and financial assets, were 848,900,000.0 assets Current receivables were $126,400,000 and cash reserves totaled $432,700,000 from which the group's interim dividend will be paid on the February 27. The group's principal investment portfolio, net of TAMs, was $380,900,000 and it includes investments in both Magellan's listed and unlisted funds. Consistent with prior periods, we aim to earn satisfactory returns for our shareholders with the Board seeing a pretax return hurdle of 10% per annum over the business cycle for the principal investments, which today has been achieved.
Over the last one, three and five years, the pretax returns were 28.3%, 16.913.8% per annum, respectively. And since inception, from 01/2017, excluding the group's investment in MMBF Capital Investments, the portfolio returned pretax 11.5% per annum. One question has just popped up in terms of lease accounting, and I just wish to confirm that the group's lease expense, rent expense explicitly, which has previously been included in occupancy costs, has not changed. There has been a change in the accounting standards from beginning of this financial year. And as a result, you will see that our rent expense is now presented in two different lines, being the depreciation expense and also within the finance costs.
And we hope we've done a reasonable job in explaining that in Note 1C to the financial statements. With that, I'll now hand back to Sarah.
Great. Thank you, Brett and Kirsten. We'll now go to questions. Can the teleconference administrator please instruct on how people can ask a question?
Thank you.
Of of the capital,
long that might take?
Look, thanks, Brandon. Look, as I said, we are continuing to work on these some of these partnership initiatives. I don't think we want to put a time frame on it. We're considering a number of these a number of these things. So, look, not much has changed there.
You're right on some of those numbers around retirement and MHH, etcetera. And we're continuing to work on that. Hamish, I'm not sure whether you want to add anything more on that.
Yeah. Brendan, I think Brett's kind of hinted at that we're working on a number of simplifications and partnership opportunities. We deliberately raised capital to give us the the flexibility to do things. All I would say is we have got very good uses for that money and watch this space.
Well, on the expenses, you're right. The second half is a little bit more seasonal this time around. As we said, it's a function of relative to where we thought, at least in our budget, where the fund was worked out. So of course, are expenses that come along with that, which is a good news, frankly, because there's more revenue. The marketing that I alluded to, the investor events, a lot of those costs this time around are going to occur in that second half, and that will push it up towards that top end.
Yeah. Yeah. The biggest swing factor in the seasonality is actually the marketing expense line because we have a very large road show. Those expenses hit the second half. We also do an investor magazine where the expenses hit the second half.
And the rest is just sort of seasonality, which goes with fund trends, you know, the average funds under management where we're sitting at the moment look like they're going to be higher in the second half than they were in the first half. And there is, as Kirsten said, an element of our expense base that is variable related to funds under management. So it's that trend line of what the average fund under management's doing six months on six months plus the marketing expense is is is pretty second half weighted.
Yeah. Yeah. Look, it's it's not gonna be materially different to that one twenty, we don't think, at this stage. And as I think I've made the point in the the the report, and I think I've said it last year, you know, with a 18%, whatever it is, cost to income ratio, the expenses aren't driving the profitability. It's the it's the top line.
Yeah. I I can tell you, it's related to the global equity strategies. The reason why people miss this is is our mandates don't necessarily have strike dates at June and December year ends. So some of them may have April and September year ends. So really, the performance you have to look at it that that point in time.
Some of them may have slightly different benchmarks as well in terms of how they get triggered. But there are different time periods in which the mandates get measured first where the funds get measured. Many of those mandates were probably getting measured closer to September 30 rather than thirty one December. And that's why people may have missed where the where performance fees could have kicked in in that six month period. Yeah.
It's a tough one because there are there are a number of ways the performance fees are expressed. Some some are saying you're saying a different period. Some are actually off average performance over a year over a number of years rather than a more spot period. The well, how we distribute it and the nature of the way that it's going to be, if you like, put is really what and one of the reasons I was describing Airlie. We see this as both listed and unlisted, if I can put it that way.
How long will it take to get to platform? We'll work through our usual processes on that. But I don't want go too far down and sort of raising too much within expectations. As I've tried to say in this, We are making progress on this, and we're very hopeful we can launch that fund prior to the year end. Hand over Hamish.
Yeah. It's a hard one. They're not that large in the scheme of things to start with. We do have a number of accounts that still have overcapacity and they sort of flow accounts. So the reason it's hard to answer the question.
So the answer is yes. We have a number of accounts that will continue utilizing capacity that has been granted, and that's sort of multiyear. But then you can get redemptions out of a $70,000,000,000 book. You can get redemptions that will kind of offset. We don't give you the gross and the net numbers there.
So, you know, it's very hard to predict on a large book exactly what the net flows or we we could probably predict what the gross flows are gonna look like, but it's much harder to predict what that net flow number would be because that that's behavior of people making internal decisions across a 140 accounts. They may they may reallocate 10%. If if we perform really well, sometimes they just decide to rebalance and take some money away from us, but actually not take our weighting in their strategy down at at all. We don't get that sort of underlying visibility. So the difference between gross and net is is is incredibly hard to predict in the scale of our business.
Yes. But on a gross basis, we need still have some meaningful account relationships that have multiyear reserved capacity. That's a small question, but I'll sit back and listen.
Go ahead and say, but only because I prefer not to run through all that. Look, I think that the, you know, the nature of the price and the income that's that's been demanded, obviously, aren't quite there. And and and again, I don't wanna get too far into this. And so we're you know, what we're looking to try and do is to come up with something that, you know, rationally helps fill that gap. We're not gonna promise, obviously, that's gonna solve everyone's problems and all that.
A number of these solutions tend to to either involve portfolio only type solutions where there's different variations of how you address a portfolio. Some tend to obviously involve more insurance like solutions, which tend to be, it might be at least quite expensive and come with other liquidity issues. We're we're we're trying to to work within amongst that, if I can put it that way, to up with something. As I've said before, we we see this as being a listed product and and accessible, as someone pointed out also on a on a platform. So I
think I'd really like to leave it
at that. I don't think it's
I'll I'll I'll add a few comments of what what what we're seeing and why we're seeing the opportunity. First of all, there's an annuity market. And annuity is effectively providing people a guaranteed income of it's often very capital intensive and very expensive, particularly about the residual value you can get out of that. So there's often very little to pass on to future generations. There, the people are wanting absolute income security.
For those people who have limited amounts of financial resources, that can be a very important product for them. So we're in no way being critical of the annuity market, but we actually regard the annuity market being a very small subset of the total retirement market. Where the larger part of the retirement market has been is people really sort of just shifting their asset allocation and moving out of equities and much more into sort of fixed income and deposit and hybrid style instruments in their portfolios, often in an incredibly simplistic way. And in that part, which is a larger part of the market, there's been very little innovation there. Now in this world where we've headed to sort of super low interest rates, it makes that large part of the market very hard to solve ultimate desires to get a decent income out of your retirement assets and keep your assets for passing on to the next generation there.
It's it's become a very difficult dilemma, and and the dilemma is people may be increasing their risk profile from a credit point of view to try and maintain their their their income. So, you know, our challenge has been is can you effectively take more equity risk into retirement? You know, I don't want to go into too much detail, but that is an area where we think ultimately is how can you take equity risk into retirement without exposing yourself to enormous what is now sequencing risk. But if markets go down, you could actually have a massive erosion of your capital. And if you're keeping wanting to take a fixed amount of income out, you're actually drawing down your capital to satisfy your income retirement needs.
So how do you solve it? It's kind of the holy grail in terms of how do you actually take a decent amount of equity into retirement without exposing yourself to excess sequencing risk. I'm not going to tell you how we've solved that problem, but it's kind of a holy grail issue that's going on. And and with this very low interest rate environment, it's becoming even a bigger a bigger issue for people. So, you know, what what it's it is if it was an easy problem to solve, lots of people would have already solved it.
The definition of what I've said is a lot of people involved in this space understand this problem very well. It just hasn't there hasn't been much innovation trying to solve that actual issue. So you could think of a product that you can take more equity style risk into retirement without exposing yourself to excess sequencing risk to maintain your income that you want. And then hopefully, at the end of the period, then then leave, you know, a substantial legacy to your beneficiaries as well. So, you know, that's what we're trying to solve for.
We think it's a massive unmet retirement need. We all understand the demographics in the baby boomers, what's happening to people bringing more and more assets into the retirement pot. It's a very large pot to go around. And hopefully, what we're doing is going to bring some innovation and new thought to the the table. Beyond that, I don't think we should say anymore, Brett.
You probably said it, so I should have said what I said. Yeah. Look. I think
we you've summed up the the the demand side. But the the problem, of course, and you've hit the nail on that in my opinion, is that you can do so much within the portfolio itself to try and help solve some of this problem. And there needs to be something else that needs to come to come to the aid to help mitigate that sequencing risk, which is really part of this issue. We we talked a little bit about this, I think, at the AGM on this. The issue that I think that that, you know, it's hard to grapple is what is the balance between all these, what are really conflicting desires amongst all this.
So we're you know, I think James is absolutely right. The demographics of this, I think I saw a stat the other day. There's like 70 odd million moving out of accumulation into into post retirement every year, and that's increasing obviously with the demographic. So it is a very large problem exacerbated, I should say, Hamish, with where fixed income, traditional fixed income securities currently are.
So, look, we do we're
trying to balance up a lot of conflicting things here, liquidity. As someone rightly asked, how we can access this product? As you rightly pointed out, the growth side of of equity is built into that, but also being able to draw what is essentially a fixed dollar amount coming out of that risky pool of assets. And that inherently gives you the problem of sequencing risk, and that's what we're trying to develop to help mitigate that. So having said all that, which we weren't going to say, we'll try and talk about it more fully into yeah, before the June.
No.
I appreciate the elaborate response. It was good detail, I think, that we haven't necessarily had in the past, but it's really not. Probably one follow on question from that is do you feel like you've got the portfolio management capabilities across the spectrum of asset classes to deliver the outcome? Or there's this is part of the partnership comment that you require some of those to have a fully rounded out offering in the retirement fund?
Yes. Let me just repeat the question. I'll paraphrase it because I understand those on the webcast can't hear it.
It was do we
have the portfolio, I guess, tools and capability in house to deal with this, or do we have to partner with someone, hence, some of the partnership things we've talked about. The answer
is no. We're gonna deal with it with with
with what we've got. And we can get into the and we're sort of veering off now into the details of the product. But we see the portfolio being built around what we currently do.
Our internal equity capabilities are quite unique for us to solve this problem. Let's not say more than that, but the combinations of what we've got internally from an equity perspective are very, very nice in terms of some of the volatility and our risk that we need to deal with.
Yes. I mean, look, the sequencing risk itself, if you think about it as a function of volatility in Hamish's and the firm's approach to thinking about downside, capturing downside risk in that is very important in helping solve that. So we think we've got the building blocks internally to leverage that.
Your
next question comes from Oliver Stevens with Hartleys.
Just I noticed you've stated a couple of Frontier badged products at about USD 26,000,000. Just wondering if you can provide some background and a few thoughts and expectations with you.
Yes. Let me again, I'll just repeat it for that. We did and you're right, we did see a couple of frontier funds. What are our expectations on that? They're looking very small.
One is the sustainable fund and mutual fund in The States for us, and another is a very small emerging markets fund that we've partnered with Frontier to seed. We're
With an external manager.
With an external manager. And we, you know, just we have an interest in that.
Okay. Thanks. And one very quick one. I noticed there was a 2 and half million dollar loan to a third party. What's the background there?
Yes. So my question was there's a $2,500,000 loan to a third party. It was just that's literally a new project seeding.
Right. Your
next question comes from James Cordup with Credit
on the sustainable strategies. They've got their three year track record now. Can you just provide a bit of feedback on how those strategies are being received in the institutional market?
Yeah. Look. I'll hand this to Hamish, but, you know, I've sort of traveled around a little bit as well. There's there's a lot of interest, obviously, in ESG and the sustainable strategies generally, I would argue. And I think that's increasing.
How institutions are looking at it varies quite a lot, think, depending on, you know, what they who they are and what their sort of underlying business, if you like, is. We're we're we're seeing a lot of discussions. Indeed, we had some people through last week, I think, on on on doing some due diligence on on the sustainable strategy. That that's increasing in my view. I'm sure you you you have much closer discussions with a lot of the institutional investors.
I
mean Yeah. I I think the ball is really starting to shift on the whole sort of sustainable and ESG discussion. Before, it was probably a very small subset of institutional clients here. I I think it's becoming much broader in terms of its its acknowledgment and its importance for stakeholders and in terms of risk management here. But for some large institutional investors, it's still very early days for them, but it's certainly getting on their on their radar.
And, you know, that that is something that we were predicting, particularly when we started with carbon and expanded it to a broader sustainable side of that. There's a lot of pressure from regulators and other things, particularly on the carbon side of the sustainability topic. And we're we're very heavily sort of branded there when people go through what we're doing in in carbon on sustainability. People are are impressed and very interested. Remember, we've only just come up for three years track record.
You know, as Don moves around the world, he has a very full calendar of meetings when when whenever he goes overseas. So there's a lot of interest. But what I would say is from your first meeting to getting the money, it really once you get your three year track record is when really starting to get meetings. And when he's going overseas, the team, he's booked up. People people seeing that.
We've had a fairly large group out doing detailed due diligence in the in in the last few weeks. We'll see we'll we'll we'll see where that hands. But think it's a space where the investor interest is growing. Some of it's still fairly early days for those institutions. The performance has been strong.
The three year track record is up, and Dom has a full calendar every time he goes overseas, speaking to institutions with people very interested in our approach and actually interested in the whole sustainability side within their organizations. And some of those organizations are building their own internal capability at the moment on sustainability of understanding what they want to do in the space. So still early days, but I think, you know, us developing this, you know, over the last four years or or or so, I I I think it's been the right thing to have done. I think we're in a nice a very nice spot in terms of where we are, particularly on the lower carbon within our sustainability here. And and from three years, you know, people often take multiple meetings and then they have to send people out to Australia.
It takes them time to convert that interest into account relationships. But I'm pretty pleased with how it's developing at this point.
Your next question comes from Pearce Builder with Infinity Investment Management.
Thanks. Good day. I mean, just a quick one from in terms of the split between in retail. So the main level is pretty at sort of 70 to 30. So just considering your thoughts on how you see that evolving stuff given the fact that certainly in retail market here locally, you know, you've had an enormous uptick in PCP from the first half of of last year, and do you think it's now getting to a critical mass where growth in retail is certainly a percentage or even dollar terms might start to flatten out?
And then secondly, around that, on the institutional side, where are you seeing that evolve both domestically and globally, more in terms of the positioning of the institutional offer on a global basis?
Yes. I'm very happy. To repeat the question is our retail business in the last six months had a very strong growth. At PCP. Are hitting a maturity point in our retail business?
And are we expecting the sort of flows to taper off there? And then how are we looking at our institutional business? So that's a very, very broad question. But first of all, in understanding our our our our retail business, in terms of our global equities retail business, it's really split into two markets. One is the adviser market.
We are very heavily penetrated in the advice industry in terms of our representation in model portfolios across the spectrum. But if you looked at our our infrastructure business, we are still partway through penetrated mainly because not all advisers are currently using infrastructure as an asset class as part of their overall portfolio construction. But as they start to adopt infrastructure, we tend to get a very high representation of those model portfolios. So that is something that's still developing, and we see a lot of interest in that space. The other side of our business is really the more broker and self directed side of the business, which is really our listed product that we've launched over the last four years or so.
I would still say the the opportunities for people to continue to increase a global equity exposure and actually their infrastructure exposure as well in seeking income in that in that in the infrastructure space. We still see enormous opportunity in that in that sort of listed more self directed space. I think we now have 80,000 direct unit holders our sort of listed investment trust. Part of why we're doing this much larger sort of investor roadshow with 12,000 people is increasing the whole awareness amongst the community and what in in in in what we're we're doing. We're very happy with the with the progression there.
We we we see very nice flows and increasing unit holder numbers there. Know, Brett has often said we've got 80,000 direct unitholders. He'll be happy when we're at half a million. And and I don't think that's unrealistic if you take a medium term view. So I think there's a lot of penetration to go in that space, but it'd be very, very hard to scale because you we're having to communicate with individual people.
And that is a very, very difficult thing for the funds management industry to do. I don't think anyone has really scaled in this space at all. I think what we've done in the listed listed space has been second to none so far. And all I would say in terms of that, Brett has referred to simplification, the single unit trying to converge unlisted worlds and listed worlds together. This has been a whole strategy we've been working on for multiple years, and all I would say is watch this space.
There is still more to be done. They're obviously trying a completely roadshow format this year. We've gone from 3,000 people to 12,000 people. And that side of the business, I think, has a lot of upside. But the one area that probably doesn't have a lot of incremental upside is the global equities advice space that's fairly mature.
Don't forget, in the first six months of this year, did the Magellan High Conviction Trust, eight sixty two million. We're not gonna do an 862,000,000 close in trust every single six months. So, you know, you know, the high uplift was was somewhat affected by that, but we'll be doing more partnership things in the in the future. And then, of course, we've got retirement product. Brett has actually slipped out in his speech that we'll be launching the sustainable, the Magellan Sustainable Fund later this year.
And you can probably think we're working on a few other things that I'm not going to go into. In terms of the institutional business, we are closed for new institutional accounts core in global equity space, but we still have a number of multiyear relationships with Reserve capacity. We still have capacity existing in our infrastructure strategy. And then, of course, we've got our sustainable strategies that are launched in that space, but just gone on their three year track records. But if you look at our business, the fundamentally largest part of fund movements by far and away at the moment is changing investment performance.
And we're giving you the breakdown there. Our long term objectives for the strategies, if you blend them all together, we get our objectives with we're aiming at 8% per annum sort of net of fees. So any new funds flow on top of that is increment above that 8% per annum, and we think we've got a whole series of things that are incremental in terms of in terms of new flows. But predicting what happens in a six monthly period, it's actually incredibly difficult to do.
Thanks, Amy.
There are no further phone questions at this time. I'll now hand back to Ms. Sarah Thorne.
Thank you. So before we final up, we will just ask one question from the webinar, which is January looks like a pretty good month for MFG. Can you comment on outperformance this half so far?
Outperformance is half. I don't I don't actually have it at the at the middle of the month. For January, we were over 200 basis points above the index for January net of fees in the global equity strategy, which is the most material one to performance fees. But things can move around a lot. So, you know, performance fees for the global for the main global fund crystallizes on the June 30.
It actually matters what happens in that unit price from the January 1 to the June 30. Whatever happens in between is quite irrelevant. Yeah. But if you measure if you looked at today, there would be material performance fees across the business sitting here today, but they can move very materially with with with with movements in investment performance. So yeah.
And we we we've seen very substantial shifts within a month occur on sort of accrued performance fees, if that's if that's why you're asking the question. But we are meaningfully ahead of benchmarks at the moment this far into the year.
Great. Well, thank you, Hamish, Brett, and Kirsten, and for everyone joining us today. We look forward to seeing you again for our full year results in August. Thanks very much.