WAM Alternative Assets Ltd (ASX:WMA) Q4 2024 Earnings Call Transcript Highlights: Strong ...

GuruFocus Research
4 min read

In This Article:

  • Portfolio Performance: Increased by a little over 5% in the last 12 months.

  • Historical Performance: Approximately 9.8% since Wilson Asset Management took over.

  • Trading Discount: Currently trading at about a 13% discount.

  • Yield: A little over 5% fully franked, grossed up to over 7%.

  • Portfolio Composition: Approximately 75% of the portfolio has been exited and reinvested.

  • Defensive Portfolio Return: Infrastructure delivered 11%, with 7.5% as income return.

  • Private Debt Yield: Running yields approximately 9%.

  • Cash Level: Just over 25%, with two-thirds already committed.

  • Realized Exits Premium: On average, 35% premium on exit to carrying value.

  • Recent Exit Example: Birch & Waite delivered over 25% internal rate of return or 3.5 times money invested.

Release Date: September 17, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • The portfolio achieved a solid performance with a little over 5% growth in the last 12 months.

  • Since Wilson Asset Management took over, the portfolio has grown by approximately 9.8%.

  • The company is democratizing access to private equity, providing a balanced portfolio option.

  • The portfolio includes a strong defensive segment with stable investments in infrastructure, healthcare, real estate, and private debt.

  • The company has successfully exited 75% of its inherited investments, indicating effective portfolio management.

Negative Points

  • The portfolio is still trading at a 13% discount to NTA, despite efforts to narrow this gap.

  • The market environment has been challenging, with low transaction volumes affecting private equity exits.

  • The valuation process is complex and varies across asset classes, which can be difficult for investors to understand.

  • There is uncertainty regarding the premium target, which may deter potential investors.

  • The company has faced difficulties in reducing its allocation to water rights, which has been volatile due to climate factors.

Q & A Highlights

Highlights of WAM Alternative Assets Ltd (ASX:WMA) Earnings Call

Q: When looking at the investment portfolio exposure, should uncalled capital commitments be considered as cash and cash equivalents? A: Dania Zinurova, Portfolio Manager: We report uncalled capital commitments as cash because we need access to those funds within 14 business days' notice. However, in our reports, we show it as total cash flow.

Q: Can you discuss the valuation process for the holdings in the portfolio? A: Dania Zinurova, Portfolio Manager: We conduct valuation assessments on all 129 assets every six months, involving independent valuation reports and market updates. Different valuation approaches are used depending on the asset class, such as discounted cash flow for real estate and KPM approach for infrastructure.

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