In April 2025, global markets were gripped by renewed uncertainty and volatility. Investors faced heightened concerns around inflation, currency fluctuations, and weakening global growth—exacerbated by Trump’s return to the White House and the reintroduction of protectionist trade policies. The renewed use of tariffs and the threat of further disruption to global supply chains have materially altered expectations around trade and economic cooperation.
Diversification vs specialisation
In this environment, investors must carefully balance two seemingly opposing forces: diversification and specialisation. Diversification, when implemented effectively in your investment portfolio, can reduce downside risk and deliver a smoother return stream across market cycles. Specialisation—particularly through alternative assets—offers the potential to generate alpha by accessing return streams that are both differentiated and less correlated to traditional markets
In the WAM Alternative Assets (ASX: WMA) investment portfolio, diversification and specialisation work in tandem to consistently deliver absolute returns through a combination of dividend yield and capital growth. WAM Alternative Assets achieves this by partnering with specialist, best-in-class investment partners across a breadth of alternative asset classes including private equity, infrastructure, real estate, private debt and agriculture and water. While the specialist nature of the underlying investment partners creates the potential for outsized returns in their respective asset class, the diversification of asset classes reduces investment portfolio volatility and provides consistent returns across market cycles. For more in-depth analysis of the benefits of diversification and specialisation in alternative assets, read my article here.
In conversation: Opportunities in alternative assets
I also sat down with Wilson Asset Management Chairman Chairman Geoff Wilson AO recently to discuss the current WAM Alternative Assets investment portfolio and the opportunities we see ahead. We also spoke about a personal experience that shaped the way I think about resilience, both in investing and in life. Watch the video to learn more.
Linen Services Exit
In April 2025, WAM Alternative Assets received initial proceeds from the exit of Linen Services Australia (LSA), a private equity investment held via our investment partner, Adamantem Capital. Linen Services Australia is a market-leading specialist laundry operator and provider of healthcare linen and textiles to hospitals and aged care clinics across Australia. Adamantem Capital acquired Linen Services Australia in 2021 and the new management team have delivered productivity and operational improvements, cost controls and improved sales processes to a business with an already strong competitive advantage. As a result, Linen Services Australia’s revenue and earnings have improved significantly over the last four years, leading to the completion of the sale of the business to an Asian Pacific private equity fund managed by Macquarie Asset Management in April 2025. The exit of LSA is a powerful example of the returns that can be achieved by private equity investments, even during heightened market uncertainty. We expect to see more exits like this as the growth component of the WAM Alternative Assets investment portfolio continues to mature and private markets transaction activity increases.
Stock Spotlight
Microgrid
(Adamantem Capital)
Microgrid Power is a compelling new addition to the WAM Alternative Assets portfolio via our investment partner, Adamantem Capital. Microgrid Power is capitalising on the rapidly expanding demand for renewable energy by offering a smart solution for shopping centres, offices, warehouses and other commercial, residential and industrial buildings at competitive prices. Microgrid Power’s innovative model involves leasing roof space on buildings, installing solar panels and battery systems, and delivering cost-effective renewable energy directly to tenants. This system reduces emissions and creates significant cost savings for both property owners and tenants through renewable energy generation and wholesale pricing advantages. This translates into predictable and robust returns for Microgrid Power, with each new site generating a secure 20-year stream of contracted cashflows from reliable energy users. WAM Alternative Assets’ investment, leveraging Adamantem Capital’s proven track record in scaling businesses, will accelerate the development of numerous contracted sites alongside existing operational assets. We anticipate a strong return on invested capital in the range of 2.5x to 3.5x, reflecting the inherent value and growth potential of this private equity investment.
2025 Shareholder Presentations
Thank you to everyone who joined us at our recent Shareholder Presentations. The Investment Team has compiled their ‘Top 10 Takeaways‘ covering key themes such as how the investment portfolios are positioning for tariffs, the high quality businesses we are investing in, the momentum trade and more. The team have also answered your most frequently asked questions, which you can read here.
As promised, you can watch the recording of the Sydney Shareholder Presentation.
