Geoff Wilson wades out of LICs for WAM Leaders

afr.com:

Geoff Wilson is taking a hall pass from his long-lasting love affair with listed investment companies, preparing to raise $500 million to $1 billion for an open-ended fund version of the firm’s successful WAM Leaders.

Matthew Haupt, lead portfolio manager for the WAM Leaders portfolio. Geoff Wilson is the chairman. 

It’s only the second open-ended fund from Wilson Asset Management’s stables in more than two decades. The firm’s original WAM Equity Fund (which is still running) was structured as open-ended at its founding almost 25 years ago. Everything since has been housed in LICs, whose discounts and premiums Wilson has ridden better than anyone else.

The new fund would run the same large-cap strategy that portfolio managers Matthew Haupt and John Ayoub have used to beat the ASX 200 by 5.2 per cent per annum since inception. But it would have the added benefit of letting investors move in and out at net tangible asset value.

The decision to part with tradition is due to two reasons.

First, WAM Leaders trades at a premium to its NTA, while some investors would love to be able to buy and sell units closer to the underlying value. The LIC raised $230 million in May, after a recut raise that had initially targeted $731.5 million.

Second, it’s a large cap strategy that’s currently running about $1.7 billion and could easily be taken up to $3 billion to $4 billion.

The firm has no intentions of ditching the LIC structure. And it has no plans to spawn open-ended clones of its other strategies – WAM Capital and WAM Microcap for example, play on the smaller end of the listed markets and hence don’t have much spare capacity to go around.

Roadshows for the new WAM Leaders fund are scheduled for October 11 to October 23 in Perth,