In This Article:
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Portfolio Performance: Up about 8% over the last 12 months; 9.3% since takeover from Blue Sky.
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Volatility: WMA portfolio volatility at 3.4% over the last 12 months, compared to ASX market volatility of 14%.
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Dividend Reserves: Over three years of dividends in reserve.
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Dividend Yield: A little over 5%, nearly 8% on a pre-tax basis.
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Trading Discount: Trading nearly 20% below the value of the assets.
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Private Debt Allocation: Currently under 5%, with plans to increase to closer to 10%.
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Shareholder Growth: Number of shareholders increased by about 37% since management takeover.
Release Date: March 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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WAM Alternative Assets Ltd (ASX:WMA) is trading nearly 20% below the value of its assets, presenting a potential buying opportunity for investors.
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The portfolio has shown solid performance, with an 8% increase over the last 12 months and a 9.3% increase since management took over.
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The volatility of WMA's portfolio is significantly lower than the market, at 3.4% compared to the ASX's 14%, offering a more stable investment.
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The company has over three years of dividend reserves, ensuring consistent dividend payouts even without immediate profit growth.
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WMA offers a strong yield, over 5%, and nearly 8% on a pre-tax basis, making it an attractive option for income-focused investors.
Negative Points
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WMA is currently trading at a significant discount to its net tangible assets (NTA), which may reflect market concerns or uncertainties.
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The upcoming shareholder vote on whether the company should continue adds a layer of uncertainty that may deter potential investors.
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The portfolio still contains legacy assets from Blue Sky, which may take time to exit and could impact performance.
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Transaction activity in private markets has been muted, potentially limiting immediate opportunities for portfolio growth.
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The share price has remained flat over the past four years, and NTA growth has been limited, raising questions about long-term capital appreciation.
Q & A Highlights
Q: Can you explain the concept of the profits reserve and its role in WMA's financial strategy? A: Geoff Wilson, Chairman of the Board, explained that the profits reserve consists of both realized and unrealized profits from the portfolio. This reserve provides confidence in the company's ability to pay consistent, fully franked dividends. The reserve currently covers over three years of dividends, ensuring stability even if no additional profits are made in the short term.