A NEW listed investment vehicle is aiming to raise up to $374 million with a view to picking missed opportunities in the ASX 200.
WAM Leaders Limited (ASX:WLE) is a little over a week into a three-week campaign to raise the funds through an IPO, and it’s taking a broadly conservative view of its appeal to investors.
WAM Leaders is issuing up to 190 million shares at $1.10 a shares, with capacity for oversubscriptions of 150 million shares. Each share comes attached with a $1.10 option, expiring in November 2017.
This gives the IPO an opportunity to create an investment vehicle worth $374 million before the exercise of options.
However, the Sydney-based company is also taking a modest view of its chances to attract investors with a minimum subscription of 15 million shares, worth just $16.5 million, also getting the company off the ground.
Geoff Wilson, the chairman of WAM Leaders and founder of Wilson Asset Management, says the new company will essentially target undervalued large-cap corporations with a view to capturing capital growth, providing a franked dividend stream and maintaining a focus on capital preservation.
“The company will provide investors access to this opportunity by predominately investing in S&P/ASX 200 index listed companies using Wilson Asset Management’s absolute bias, bottom-up, benchmark unaware, fundamental investment methodology,” he says.
While the company has a preference for undervalued companies, it has a broad mandate to invest in any Australian and international securities, as well as bills of exchange, negotiable instruments, debentures and cash.
Wilson says WAM Leaders will utilise Wilson Asset Management’s investment strategy to assess target investments.
This will involve extensive research focusing on free cashflow, return on equity and the quality of the company in which it plans to invest.
“Each company is rated with respect to management, earnings growth potential, valuation and industry position,” says Wilson.
“Under this process, Wilson Asset Management will only invest in a security once it can identify a catalyst or an event that it expects will change the market’s valuation of that security.”
Wilson says a ‘market driven’ investment process also aims to take advantage of ‘short-term relative arbitrages and mispricings’ on the ASX.
“This part of the investment portfolio is traded actively. Opportunities are derived from initial public offerings, placements, block trades, rights issues, corporate transactions, such as takeovers, mergers, schemes of arrangements, corporate spinoffs and restructurings, arbitrage opportunities, LIC discount arbitrages, relative value arbitrages, short selling and trading market themes and trends.”
The WAM Leaders offer is open until May 17 and the shares are expected to start trading on May 30.