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The billionaire Lowy family has taken a significant stake in the funds management business Magellan, days after the financial group announced it was merging with its part-owned investment bank, Barrenjoey.
Magellan, which manages about $40 billion for clients, on Friday told the ASX that a Lowy family trust had bought a 5.1 per cent stake in the company.
The Lowy family bought into Magellan as part of a capital raising that the company launched this week when it announced it was buying the Sydney-based investment Barrenjoey, which was founded in 2020 with Magellan as one of its initial shareholders. Business veteran David Gonski will be the chair of the merged group.
Steven Lowy released a statement on Friday confirming the investment, and pointed to the family’s history with both Magellan and Barrenjoey.
“The Lowy family has a long history with MFG, having been both a shareholder and an investor in its funds,” Steven Lowy said.
“We also have longstanding relationships with the senior team at Barrenjoey and have followed their progress since its establishment. We have taken the opportunity to become a cornerstone shareholder in MFG [Magellan Financial Group] with immediate effect through the placement this week as we believe the merged entity would be a sound long-term investment.”
The merger deal will involve Magellan issuing shares to other shareholders in Barrenjoey, and Magellan has been raising money from investors as part of the transaction.
The Magellan board has unanimously recommended shareholders support the deal, and investors will vote on the transaction next month.
Magellan did not comment on the Lowy family’s investment, aside from its ASX notice informing investors of the change.
Chairman Andrew Formica told shareholders the merger would create a diversified financial group spanning investment management, corporate finance, equities, fixed income and capital markets.
“As a founding investor, MFG has participated in the strong growth of Barrenjoey over its first five years. This merger sets the foundation for future growth and enhanced MFG participation,” Formica said.
Markets have supported the deal, with Magellan shares rising more than 8 per cent over the past five days, despite the wider sharemarket falling over this period.
Magellan’s annual report from last year said other substantial shareholders (those with a stake of 5 per cent or more) were global giants State Street, BlackRock, Dimensional and Vanguard.
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Clancy Yeates is deputy business editor. He has covered banking and financial services, and was previously national business correspondent in the Canberra bureau.Connect via X or email.From our partners
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