Sydney-based WAM Alternative Assets (WMA), managed by Nick Kelly, is working to close the discount at which its listed investment company (LIC) currently trades. WMA is a diversified portfolio of alternative assets, offering investors opportunities aimed at flexibility and diversification. Wilson Asset Management, which oversees about $6 billion in assets, believes WMA will eventually reach Net Tangible Asset (NTA) parity or premium, as will seven of its nine other LICs.
This discount is largely due to the wider market’s lower awareness of alternative assets compared to traditional listed equities. While retail investors are increasingly aware of the benefits of diversification, they may not fully appreciate the multi-year time frame required for new alternative investments to perform strongly. Kelly noted that the WMA team has diligently reshaped the portfolio, and investments made years ago are now gaining momentum, improving performance that is resilient to downturns and unrelated to listed equities.
The portfolio’s private credit, mainly corporate debt, comprises less than 10 percent of its alternative allocation. Kelly acknowledged recent sector scrutiny but highlighted the WMA’s strict criteria for private credit investments: significant exercise experience, careful valuation methods, and transparent disclosure of fees. WMA maintains minimal exposure to real estate, focusing primarily on the commercial office, industrial, and life sciences sectors. Water rights comprise 12.5 percent of the portfolio, positioned to benefit from limited supplies, ongoing government buybacks, and expected dry conditions from El Niño. Kelly emphasized water as a strong diversifying asset, although acknowledged the challenges of legacy agricultural holdings due to sector pressures.
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