Wilson Asset Management’s new large company-focused fund will deviate from the S&P/ASX 200 index far more than most competing funds, according to Matthew Haupt, who is set to lead the $300 million-plus war chest.
He was tapped by small-caps doyen Geoff Wilson to run the group’s first listed large-caps fund, called WAM Leaders, along with analyst John Ayoub, who was poached from Credit Suisse in March.
WAM’s investment style is active, meaning it involves monitoring and trading positions, and the manager ignores the weighting a company has in a stockmarket index.
“WAM Leaders will provide investors a rare opportunity to gain exposure to the S&P/ASX 200 Index with an active index- and sector-unaware fund manager,” Mr Haupt told The Australian.
“Our flexible mandate and active style ensures we will only hold stocks that we think we can make money out of.”
WAM Leaders opened its offering to investors yesterday as it sought to raise $165m, with the ability to double the size of the fund with over-subscriptions. WAM aims to list the fund on the ASX on May 30, after it lodged its prospectus with the corporate regulator last week.
Mr Wilson, Mr Haupt and WAM chief investment officer Chris Stott were marketing the fund in Melbourne yesterday, after an initial Sydney presentation.
Mr Haupt said the performance of most large-cap fund managers largely reflected the performance of the S&P/ASX 200 due to restrictive mandates and risk-averse strategies.
“Index-hugging is generally a function of risk management and managers with restrictive mandates in place that force them to stay close to the index,” he said.
“Hugging the index is also a safe option for fund managers that have enormous pressure to perform and to win investment mandates.
“We don’t follow this trend — we prefer to focus on the investment process rather than performance.”
Mr Wilson, who chairs the fund, said WAM Leaders would seek to find undervalued growth companies in the benchmark index.
“Personally, I don’t want to lose money,” he said. “I’ve got my money in all these funds and I want to make absolute returns.
“Our default position is cash and we will only invest if we can find a catalyst that is going to change the valuation of the company.”
WAM will collect a 1 per cent annual management fee from the firm, and 20 per cent of any outperformance of the S&P/ASX 200 Accumulation Index.
A weak local currency and the increasing appeal of Australia as a travel destination for overseas investors is driving a tourism boom, Mr Haupt said.
Domestic and international tourism contributed $94.5 billion to the local economy in 2015, and that figure is expected to hit $145bn by 2024-25, according to Tourism Research Australia.
WAM Leaders will seek to take advantage of the growth through an investment in theme park and health club operator Ardent Leisure.
The market welcomed Ardent’s plans to sell its marina business and invest in accelerating the rollout of its Main Event family entertainment centres in the US.