LICs targeted as Wilson’s WAR lists
Wilson Asset Management will list its Strategic Value (WAR) fund on the Australian Securities Exchange (ASX) today, targeted discounted listed investment companies (LICs) and trusts.
The fund was meant to list on 25 June but was delayed due to the COVID-19 situation in Sydney.
Its initial public offering closed on 10 June and exceeded the $225 million maximum subscription.
The fund would look to take advantage of market mispricing opportunities including securities trading at discounts to assets or net tangible assets with the main focus being on LICs.
Geoff Wilson, lead portfolio manager at Wilson, said: “Myself and the team will be investing capital in these discounted asset opportunities, primarily listed investment companies and listed investment trusts trading at a discount to their underlying asset values. We will be working with the investee companies to assist in closing their share price discount to net tangible assets.
“If you have a closed-end fund that owns other listed entities, it is very easy to work out what that company is worth. You can do this on a per share basis and the price it is trading at. If there is a big discount then you question if there is a catalyst or event that is going to change that valuation to drive it from a discount to NTA, to a premium to NTA. That is the opportunity we are looking for.”
In May, Wilson said there were 15 LICs which could be purchased and were at different levels of maturity while, over the long term, the portfolio was expected to average between 10-30 holdings.
It would aim to pay fully franked dividends and any fully franked dividends received from LICs would be invested onto shareholders.
AUTHOR
Laura Dew
Recommended for you
Global X has announced the launch of its latest ETF, providing access to Japan’s largest companies under a low-cost structure.
ETF usage by high-net-worth investors is on the rise with allocations rising by a third in the past year but it lags behind direct equity exposure.
Real estate fund manager Quay Global Investors has listed two active ETFs on the ASX, providing investors with access to real estate equity portfolios.
T. Rowe Price has launched a multi-strategy credit fund in partnership with US firm Oak Hill Advisors to bring the strategy to Australia for the first time.
