Is a twist on annuities the golden goose for Magellan? – The Australian Financial Review
However, it is the next leg that is being kept under wraps.
Sources said Magellan had ex-BlackRock operative Paddy McCrudden and Brett Cairns working on a post-retirement product, that could blow the market wide open.
They’re said to be in talks with regulators – “twin peaks” the Australian Securities and Investments Commission and Australian Prudential Regulation Authority – with an income and retirement product that would be pitched at the country’s ageing population.
As it stands, annuities are available via other avenues, but they’re costly and Magellan reckons it might be able to come up with a more affordable option which would be annuity-like in nature but with a couple of twists. Magellan has had its new strategy in development for a couple of years, and is said to be six months away from the seeding stage.
It’ll be interesting to see whether Magellan can make it work. The firm has had success with innovations in the not too distant past – including opening up the active ETF market – but annuities and annuity-like products are a notoriously tough nut to crack. They may make a lot of sense for Australians reaching retirement age, but they’re proving very slow to catch on.
Further afield, Street Talk is tipping a long/short global equities strategy out of the manager, to be headed by Kris Webster. It’s unlikely to be in the near term – Magellan has shown it likes to seed such funds in-house and run them for a couple of years before going public – and from what we understand there has been no move yet.