Hamish Douglass breaks his silence

Hamish Douglass, co-founder of Magellan Financial Group, has revealed that he experienced suicidal thoughts during and after the firm's unravelling, telling Rampart in his first interview since his shock departure that he could see no way out. He also confirmed for the first time publicly that he is gay, ending years of rumours he says were maliciously weaponised to spook investors and ultimately forced him out of the company he built. 

"I'd actually started having suicidal thoughts, a number of them,” Douglass said. "What's frightening is I don't know the time when people start having those thoughts to when they actually do it. And people often say when people commit suicide, 'I saw them last week,' or 'I saw them yesterday and they seemed fine.' And many people at Magellan couldn't understand because they said, 'I saw Hamish the week before he spoke at a conference. He looked fine.' I wasn't fine." 

Douglass, speaking on a new episode of Rampart Talks with Rampart founder Joe Aston, said he told his now ex-wife Alexandra that he was gay in May 2021, ending a marriage of nearly 30 years. He endeavoured to manage the separation privately before The Australian Financial Review reported on the persistent market gossip that he'd split from his wife. 

On his decision to come out to his family – and now publicly – rather than conceal his sexuality, Douglass said he was directly influenced by his late father Gordon, who never publicly divulged his own sexuality despite conducting relationships with men throughout his marriage. 

"Even on his deathbed, one of these boyfriends was in the room when we turned up, and it was deeply, deeply hurtful to my mother and to us that my father had been having this secret life, and I didn't want to have a life in secrecy," Douglass said. 

2021 was a brutal year for Douglass as personal and professional difficulties converged. In addition to his marital separation and his mother's death in June 2021, Magellan faced intense scrutiny after a series of ill-fated investment calls led to steep index underperformance after 14 years consistently beating its benchmark.

Magellan held large positions in Chinese technology stocks Tencent and Alibaba, which were being crushed by Beijing's sweeping regulatory crackdown. It simultaneously held a defensive cash position right as equity markets surged following the announcement of Covid vaccines. 

Magellan, Douglass said, started gapping from its benchmark from the day the vaccines hit, and he was "feeling the pressure" having made "a number of mistakes around that period."

On the eve of the AFR's separation story, Brett Cairns resigned as Magellan's CEO with immediate effect, citing only personal reasons. 

Douglass told of being "gobsmacked" when confronted by a news outlet with an allegation that Cairns had resigned in moral disgust after discovering Douglass was having an affair with one of his children's school friends. He categorically denied the allegation, though vicious rumours continued to circle.

"It was being implied that I was kind of a pedophile," Douglass said. There were Asian boys involved and all sorts of things. If [that] had been printed, it was game over for Magellan."  

Less than two weeks after Cairns' resignation and the confirmation of Douglass's separation, Magellan's largest institutional client St James’s place redeemed its $20 billion mandate.

"It was a shock," Douglass said. "But at the end of the day, clients in the funds management business, we're fiduciaries of their money, and they have the right on any day to take the money and do with it what they want. I respect that. I'm not complaining about the fact that they took the money."

Magellan announced his indefinite medical leave on February 7, 2022. Douglass has not, however, walked away from Magellan entirely.

The interview was conducted the week before Magellan announced its effective takeover by Barrenjoey on March 2.

"Barrenjoey was my idea," he said. "I approached Guy [Fowler] and Matt [Grounds], and said to them, why don't you form a new investment bank and I'll bankroll the whole thing out of Magellan."

Magellan took a 40 per cent equity stake while deliberately taking only a 5 per cent voting interest – ensuring the partners retained control and making the firm attractive to a future foreign investment bank partner. That structure, he said, "has been the magic of why it's been so successful."

Douglass was full of praise for Barrenjoey's founders but rued the personal cost of having backed them. "People have told me, in hindsight, that part of the vitriol to me was retribution [from other investment banks] for what I'd done about Barrenjoey," Douglass said.

Douglass always envisaged that Barrenjoey and Magellan would eventually merge to form a mini-Macquarie Group, but ran out of time. Nevertheless, the investment he conceived of, structured, and bankrolled is one he said he remains very proud of.