Wilson Asset Management is finalising plans for a $300 million international equities fund to be listed on the Australian Stock Exchange, the first foray of the widely followed fund manager into global stock picking.
WAM chairman Geoff Wilson said a new fund, to be called WAM Global, was on track to lodge a prospectus in April and has appointed five brokers to the Listed Investment Company raising that he says will be well supported by the shareholders seeking exposure to global equities.
“I am slightly underweight to global stocks personally, so I am sure I am like other Australian investors that are significantly underweight,” Mr Wilson told The Australian Financial Review.
“The growth in fund managers in global equity investing will continue to be strong for the next five decades.”
Mr Wilson said that around 60,000 shareholders in WAM entities, which include several listed Australian equity funds, had been looking for the manager to launch a global fund, as the likes of Platinum and Magellan, which raised $1.6 billion in late 2017 via its Global Trust offering, have grown their assets by tens of billions of dollars.
“I don’t think we will get to $56 billion as quickly as Magellan,” he said.
“A lot of people might think that $300 million is modest. With that we will have potential to upscale it a bit. One of the things we want to make sure we perform.”
‘Taking as low risk as possible’
Mr Wilson said the fund would use the process it applies to managing money in Australia to run its global portfolio.
“We look for undervalued growth companies and we only buy them when we see a catalyst that will change valuations, otherwise we will sit in cash. So it’s taking as low risk as possible and try maximise our returns,” he said.
The brokers understood to be appointed to the raising are Commsec, National Australia Bank, Morgans, Ord Minnett and Taylor Collison.
The WAM Equity Fund, which Mr Wilson started on January 1, 1998, has delivered 22.1 per cent per annum since inception compared to 8.8 per cent for the S&P/ASX All Ordinaries index.
Mr Wilson said he would help oversee the fund with chief investment officer Chris Stott but a lead global portfolio manager has been identified and will be announced in due course.
The raising is understood to be the only imminent global equity fundraising on the exchange this year after a busy 2017 when a rush of managers targeted listed fund structures to grow their assets under management.
Magellan’s $1.6 billion raising broke records for the largest list fundraising on the ASX while VGI Partners raised more than $600 million.
In addition to closed-end listed investment company or trust offerings, Kerr Neilson’s Platinum Asset Management listed two exchange traded managed funds while Montgomery Global Investment Management listed its Global Equities exchange traded fund in the final trading week of the year. That followed a highly successful LIC raising by Antipodes Partners, the global manager founded by former Platinum fund manager Jacob Mitchell.
The funds have taken advantage of growing demand among Australian investors to diversify their exposure away from Australian stocks and property.
Over three years, Australian stocks have delivered a total return of 28 per cent, compared to 40 per cent in global stocks and almost 45 per cent for US stocks.
Australian equity managers and hedge funds are understood to be lining up listed offerings in 2018 as more investors gravitate to exchanges to invest in fund managers.
Among them are Nikko, which is reported to be targeting an income-focused listed investment company, structured credit fund Gryphon, which is planning a $350 million raise, and high-flying fund managers L1 Capital, which may float an offering of its long/short fund.