By Luke Housego

 

Wilson Asset Management’s new alternative assets strategy will expand into growth industries in the digital and low carbon economies in a bid to shake up interest in the often typecast space, says new lead portfolio manager Dania Zinurova.

With an intention to steer away from traditional alternative assets such as toll roads and airports, the highly credentialled investment professional plans to look at infrastructure assets such as data centres, echoing the growth-over-value focus in sharemarkets.

The idea is “to see where are the strong tail winds that we see in the market, for example digital infrastructure [and] renewable energy,” said Ms Zinurova, who will oversee the WAM Alternative Assets listed investment company.

“Those are assets if you look at their underlying contracts and income and capital appreciation, they would be less linked to GDP compared to more traditional infrastructure.”

The objective takes on greater meaning with the weak growth outlook in an economy still reeling from the pandemic.

“The lesson learnt for investors is really to structure a portfolio in a way that it would be resilient throughout different economic cycles,” Ms Zinurova said. “Given where we are now in the moment, it’s probably one of the major global economic crises that [we’ve ever been] through.

“Let’s take as an example, infrastructure. Infrastructure has been a very popular asset class among Australian investors but also among global investors.

“And most of the traditional infrastructure strategies, they would be invested in GDP-linked assets.” That includes airports, ports, and toll roads. “Those portfolios would be significantly affected by the current economic crisis.”

The Russian-born fund manager explained that the WAM strategy will also target growth in private debt as well as areas of infrastructure benefiting from structural tailwinds.

Antipodean

WAM recruited the investment veteran from the investment services arm of insurance and financial services giant Willis Towers Watson, where Ms Zinurova led research teams with coverage across, equities, credit and alternative assets.

And while Ms Zinurova’s professional life has largely been based in London, New York and Sydney, her career in finance started in 2002 at Bank Uralliga in Chelyabinsk, 1500 kilometres east of Moscow where she grew up.

At the time, the Russian banking sector was in its infancy after the state-controlled system was liberalised under the reforms of the Soviet Union’s last leader, Mikhail Gorbachev.

Recalling this period, the Russian banking system at the time was still going through its developmental stage, Ms Zinurova explained.

“It was a period when sometimes you would have a new bank opening and then closing again within two months time. It was definitely very exciting but also challenging periods for the banking sector.”

After further study in Europe and the UK, Ms Zinurova entered funds management with the global asset manager Russell Investments before moving to Australia in 2013 to head up Willis Towers Watson’s real assets team.

Valuations and liquidity

The experience in property and other unlisted assets gives WAM’s new portfolio manager an acute sense of the risks tied up with putting a price on an asset in the current climate.

“In the current market environment, the liquidity has really dried up—there are not as many transactions happening,” she said. “And when you look at independent valuation reports now, you will see they add a disclaimer that the valuation should be used with caution.

“So even independent valuers are not really in the position to come and say ‘This is by how much your asset fell or the [capitalisation] rate has contracted.'”

WAM was awarded the management rights of the old Blue Sky Alternatives Access Fund listed investment company following shareholder approval in September. It intends to return the share price to a premium to net tangible asset value.

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