SYDNEY, Aug 17 (Reuters) - Shares in Magellan Financial Group fell by a tenth on Tuesday, the most in over a year, after the Australian fund manager posted disappointing earnings due to large losses at partially-owned boutique advisory firm Barrenjoey Capital Partners.

Sydney-based Magellan reported a 6% fall in adjusted net profit to A$412.7 million for fiscal 2021, missing expectations of A$434.5 million.

Magellan booked A$41 million in investment losses largely associated with its 40% stake in Barrenjoey, which has been building its banking team and infrastructure since launching in September 2020.

Magellan shares fell as much as 11.2% during the session, the sharpest fall since March 2020, before they recoverd slightly to close A$46.20, their lowest level since May 25.

Barrenjoey, whose name means "young kangaroo", has raided bulge-bracket investment banking rivals for their senior talent https://www.reuters.com/article/uk-ubs-group-australia-idUKKBN2B70BI and hired about 250 staff, causing ripples https://www.reuters.com/world/asia-pacific/dealmakers-australia-scramble-talent-new-entrants-flex-muscles-2021-03-18 in the local investment banking industry.

The start-up investment bank would likely post another loss in the current fiscal year, although "very substantially reduced", Hamish Douglass, Magellan's Chairman and Chief Investment Officer said.

"It is really hard to predict. They pull off a big M&A transaction with a $20 million fee, suddenly they're in a profit, you know," he told investors in a call.

"I wouldn't get caught up with these early stage accounting entries, it's about the value creation."

To date, Magellan has invested A$156 million in a 40% non-dilutive economic stake in Barrenjoey. Barclays Plc owns a 10% stake in the boutique firm. (Reporting by Paulina Duran in Sydney; Editing by Jane Wardell)