Wilson Asset Management seeks up to $731.5m in investment firepower for Leaders fund

Wilson Asset Management's WAM Leaders (ASX: WLE) fund has today offered a bullish sign on leading Australian stocks today with plans to raise up to $731.5 million for further investments in large-cap companies.

WAM Leaders' raise will comprise two parts including a share purchase plan (SPP) worth up to $487.7 million, and a placement of up to $243.8 million that will be available for existing professional and sophisticated investors.

The issue price in both cases is expected to be $1.48 per share, representing a 5.1 per cent discount to the WLE price when the market opened.

The discount would have been greater still had WLE made this announcement two weeks ago when shares were trading at close to $1.60

Listed in 2016, WAM Leaders' active investment process aims to identify large-cap companies with "compelling fundamentals, a robust macroeconomic thematic and a catalyst". Examples include its January star performers, toll road companies Transurban Group (ASX: TCL) and Atlas Arteria (ASX: ALX).

WAM Leaders, a listed investment company (LIC), does not publish the full composition of its portfolio but by the end of January it had more than $1.7 billion in gross assets of which close to $1.67 billion are tied up in shares, with its Top 20 also including - in no particular order - Coles Group (ASX: COL), CSL (ASX: CSL), National Australia Bank (ASX: NAB) and The Star Entertainment Group (ASX:SGR).

In December the LIC's top performers were Lendlease Group (ASX: LLC) and Dexus (ASX: DXS), followed by a strong December for its mining investments in BHP Group (ASX: BHP), Rio Tinto (ASX: RIO) and Fortescue Metals Group (ASX: FMG).

"The proceeds of the additional capital will be invested in accordance with the company's disciplined and proven investment process," WAM Leaders chairman Geoff Wilson AO wrote to shareholders in the SPP booklet.

"WAM Leaders’ active investment approach, which focuses on large-cap companies with compelling fundamentals, a robust macroeconomic thematic and a catalyst to drive the share price higher, which has led to strong investment portfolio performance throughout the company’s history.

"As at 28 February 2023, the WAM Leaders investment portfolio has increased 14.8 per cent per annum since inception in May 2016, outperforming the S&P/ASX 200 Accumulation Index by 6.0 per cent per annum."

Last month WAM Leaders reported an 11 per cent lift in its operating profit after tax to more than $85 million in the December half, with directors increasing the interim dividend by 12.5 per cent to 4.5 cents per share.

"The strong investment portfolio performance since inception demonstrates the strength of our active investment process. Using our framework, we have navigated various volatile investment markets with discipline," WLE lead portfolio manager Matthew Haupt said on 13 February.

"The market has been in dislocation for the last few months, which has been challenging but allowed us to build positions in great companies at attractive valuations. We expect the market is near a narrative and positioning inflection point, which will provide a tailwind for the investment portfolio over 2023."