WAM ACTIVE LIMITED — Investor Presentation 2008

Nov 18, 2008

WAM ACTIVE LIMITED (WAA) A.B.N. 49 126 420 719

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PRESENTATION NOVEMBER 2008

WAM ACTIVE LTD What is it?

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• Trader for tax purposes

• High turnover, actively managed fund

• Concentrates on:

– Corporate transactions - takeovers & restructurings – Capital raising – Block trades – Discount to assets arbitrage – Franking credit arbitrage – Short selling securities

WAM ACTIVE LTD OBJECTIVES

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• Derive an absolute return over the

• long term

• Deliver investors an income stream in the form of fully franked dividends

• Preserve the capital of the Company

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WAM ACTIVE LTD PERFORMANCE

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10
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WAM Active Ltd - Gross Portfolio before all expenses, fees, taxes and dividends

All Ordinaries Accumulation Index

WAM ACTIVE LTD DIVIDENDS

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• Intension is to pay an increasing fully franked dividend stream over time.

• Dividends are only payable from retained earnings or current year profits of the company.

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	PORTFOLIOSTRUCTURE	PORTFOLIOSTRUCTURE	PORTFOLIOSTRUCTURE	PORTFOLIOSTRUCTURE
	As at 31 October
		As at 31 October
		2008
	Investment Type	$m	%
	ListedEuities	264	191%
	q	.	.
	Term Deposits and Cash	11.18	80.9%
	Total Long Portfolio	13.82	100.0%
	Total Short Portfolio	(-)	-%
		No.
	Ordinary Shares on issue	15,400,101
	Options on issue ($1 expire 17-06-09)	15,400,100

TOP 10 TRADING STOCKS

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					% of
	Code	Company	Market Value $	% f L o ong Portfolio	G ross Assets
	CBA	Commonwealth Bank of Australia	302,250	11.4%	2.2%
	NAB	National Australia Bank Ltd	269,888	10.2%	2.0%
	ASX	ASX Ltd	255,197	9.7%	1.8%
	ANZ	ANZ Banking Gro p Ltd u	208 320 ,	7 9% .	1 5% .
	AMP	AMP Ltd	155,440	5.9%	1.1%
	SGP	Stockland	148,875	5.6%	1.1%
	ALZ	Australand Property Group	141,600	5.4%	1.0%
	MVU	MatrixView Ltd	135,895	5.1%	1.0%
	EBI	Everest Babcock & Brown Alt. Inv Trust	131,610	5.0%	1.0%
	ANZPB	ANZ Banking Group Ltd Prefs	108,015	4.1%	0.8%

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WAA NTA vs Putting Money Into Index Fund

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$
1.05
1
0.95
0.9
0.85
0.8
0 75.
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08
After Tax Index NTA
WAA NTA
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WAA NTA & Share Price History

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1.05
1.00
0.95
0.90
0.85
0.80
NTA Pre-tax NTA After-tax Share price
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GENERAL MARKET SLIDES

The following charts show the Australian an d US mar k ets are at t h e c h i n eapest Both markets have fallen many years. close to 50% in value at a time when interest rates are declining.

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- ASX200 VALUATION OF EQUITIES RELATIVE TO BONDS: MULTIPLE OF BOND YIELD TO EQUITY EARNINGS YIELDS

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2
1.8
EQUITIES RELATIVELY OVERVALUED
1.6
1.4
+1 Std Dev
1.2
Average
1
0.8
-1 Std Dev
0.6
EQUITIES RELATIVELY UNDERVALUED
0.4
0 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 0 0 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8
Aug-9 Feb-9 Aug-9 Feb-9 Aug-9 Feb-9 Aug-9 Feb-9 Aug-9 Feb-9 Aug-9 Feb-9 Aug-9 Feb-9 Aug-9 Feb-9 Aug-9 Feb-9 Aug-9 Feb-0 Aug-0 Feb-0 Aug-0 Feb-0 Aug-0 Feb-0 Aug-0 Feb-0 Aug-0 Feb-0 Aug-0 Feb-0 Aug-0 Feb-0 Aug-0 Feb-0 Aug-0
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Source: GSJBW Research estimates

- ASX200 Industrial VALUATION OF EQUITIES RELATIVE TO BONDS: MULTIPLE OF BOND YIELD TO EQUITY EARNINGS YIELDS

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1.6
EQUITIES RELATIVELY OVERVALUED
1.4
1.2 +1 Std Dev
Average
1
0.8
-1 Std Dev
0.6
EQUITIES RELATIVELY UNDERVALUED
0.4
ug-90 A Feb-91 ug-91 A Feb-92 ug-92 A Feb-93 ug-93 A Feb-94 ug-94 A Feb-95 ug-95 A Feb-96 ug-96 A Feb-97 ug-97 A Feb-98 ug-98 A Feb-99 ug-99 A Feb-00 ug-00 A Feb-01 ug-01 A Feb-02 ug-02 A Feb-03 ug-03 A Feb-04 ug-04 A Feb-05 ug-05 A Feb-06 ug-06 A Feb-07 ug-07 A Feb-08 ug-08 A
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Source: GSJBW Research estimates

S&P500 - VALUATION OF EQUITIES RELATIVE TO BONDS: MULTIPLE OF BOND YIELD TO EQUITY EARNINGS YIELDS

2.1 1.9 1.7 EQUITIES RELATIVELY OVERVALUED 1.5 1.3 +1 Std Dev 1.1 Average 0.9 0.7 -1 Std Dev 0.5 EQUITIES RELATIVELY UNDERVALUED 0.3

Source: GSJBW Research estimates

S&P/ASX Small Ordinaries Index: 1 March 2003 to 31 October 2008

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S&P/ASX All Ordinaries Index: 1 March 2003 - 31 October 2008
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S&P/ASX Small Resources Index: 1 March 2003 - 31 October 2008
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S&P/ASX Small Industrials Index: 1 March 2003 - 31 October
2008
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S&P/ASX Industrials Index: 1 March 2003 to 31 October
2008
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S&P/ASX Financials Index: 1 March 2003 to 31 October
2008
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Historical Oil Price - WTI Spot

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$160
$140
$120
$100
Oil price
$80
$60
$40
$20
$0
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S&P/ASX All Ordinaries Index: 1 January 1900 to 31 October 2008

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14,000
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All Ordinaries: 28 February 1929 to 30 September 1934

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55
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DOW JONES: 1 January 1900 to 31 October 2008

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14,000
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Market Indices: 1 March 2003 to 31 October 2008

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700
Small Resources
600
Resources
Small Ordinaries
500
All Ordinaries
Industrials
400
Small Industrials
Financials
300
200
100
0
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Technology vs Commodities Bubble

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8,000
Nasdaq
7,000
S&P500
6 000, All Ordinaries Index
S&P/ASX300 Resources
5,000
4,000
3,000
2,000
1,000
0
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COMPANY VALUATION SLIDES

The following charts show the price being id f or A ustra li a s ’ ma or i are pa j compan es the lowest in more than 2 decades. While we ex ect earnin s to decline si nificantl p g g y in the coming 12 months, share prices have already declined in anticipation of the . earnings slump

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.
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ASX - 1 year orwarf d PER

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45
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25
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0
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Source: Macquarie Research

FXJ - 1 year forward PER

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35
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25
20
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0
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Source: Macquarie Research

LLC - 1 year forward PER

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30
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Source: Macquarie Research

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NAB - 1 year forward PER

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18
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10
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0
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Source: Macquarie Research

TAH - 1 year orwarf d PER

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30
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Source: Macquarie Research

TOL - 1 year orwarf d PER

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40
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Source: Macquarie Research

- HVN 1 year forward PER

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50
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Source: Macquarie Research

45 50	SEK 1 f d PER - year orwar
35 40
25 30
10 15 20
0 5

Source: Macquarie Research

What is a Listed Investment Company (LIC)?

• Closed end poo ol f capital that invests n i the stock

• market

Closed end means investors leave the fund by selling shares to another investor rather than redeeming money from the Fund.

• No money leaves the fund.

• Super or si tructure The manager of a LIC fund does not have to sell stocks in the portfolio to raise cash for the departing investor whereas open end f un d s requ re i th e manager o qu t li id a e s oc t t k s o nance re t fi d emp ti ons. These redemptions often occur when the market is falling and so the manager has to sell stocks which they believe represent good value.

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Pre 1998 Listed Investment – as at 31 October 2008 Companies

Companies – a	s at 31	Octob	Octob	er 2008	er 2008
		Share		Pre tax		Premium/
Name	Code	price*			NTA	Discount
Djerriwarrh Investments	DJW	$	3.60	$	3.41	5.57%
Argo Investments	ARG	$	5 70 .	$	5 44 .	4 78% .
AFIC	AFI	$	4.24	$	4.18	1.44%
Milton Corporation	MLT	$	16.01	$	15.93	0.50%
Aberdeen Leaders	ALR	$	1.25	$	1.28	-2.34%
A st alian United u r	AUI	$	6 00 .	$	6 15 .	2 44% - .
Choiseul Investments	CHO	$	4.50	$	4.64	-3.02%
Diversified United Investments	DUI	$	2.63	$	2.78	-5.40%
Whitefield	WHF	$	2.75	$	3.07	-10.42%
b k l Iron ar Capita	IBC	$	0.40	$	0.48	-15.79%
Average						-2.71%

Average

*as at 17 November

Post 1998 Listed Investment – as at 31 October 2008 Companies

Companies –	as at	31 Oct	31 Oct	ober 2	ober 2	008
		Share		Pre tax		Premium/
Name	Code	price*			NTA	Discount
Aurora Sandringham	AOD	$	1.22	$	1.22	-0.11%
AMCIL	AMH	$	0.53	$	0.57	-7.02%
WAM Active	WAA	$	0.85	$	0.93	-8.44%
Mirrabooka Investments	MIR	$	1 40 .	$	1 53 .	8 50% - .
Century Australian Investments	CYA	$	0.79	$	0.90	-12.22%
Brickworks Investment Company	BKI	$	1.06	$	1.25	-15.20%
Emerging Leaders	ELI	$	0.60	$	0.80	-25.00%
Australian Leaders Fund	ALF	$	0.70	$	0.94	-25.87%
HFA Accelerator	HAP	$	0.46	$	0.63	-27.20%
WAM Capital	WAM	$	0.90	$	1.28	-29.90%
Wilson Investment Fund	WIL	$	0.59	$	0.86	-31.51%
Magellan Flagship Fund	MFF	$	0.57	$	0.87	-35.06%
MMC Contrarian	MMA	$	0.46	$	0.71	-35.12%
Contango Microcap	CTN	$	0.65	$	1.02	-36.15%
Linq Resources	LRF	$	0.44	$	0.74	-40.54%
Everest Babcock & Brown	EBI	$	1.61	$	2.80	-42.50%

Average

-23.77%

*as at 17 November

Argo Investments (ARG)

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40%
35%
Premium/Discount to NTA
30%
25%
20%
15%
10%
5%
0%
Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 Oct-06 Oct-07
-5%
-10%
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AFIC (AFI)
35.00%
30.00%
Premium/Discount to NTA
25.00%
20.00%
15.00%
10 00%.
5.00%
0.00%
Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 Oct-06 Oct-07
-5.00%
-10.00%
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Profit Leverage to a fall in Revenue

			% change in Revenue
			-5%	-10%
	Revenue(m)	$100	$95	$90
	Costs(m)	$80	$80	$80
	Profit(m)	$20	$15	$10
	% change in Profit		-25%	-50%
			% change in Revenue +5% +10%
			% change in Revenue
			+5%	+10%
	Revenue(m)	$100	$105	$110
	Costs(m)	$80	$80	$80
	Profit(m)	$20	$25	$30
	% change in Profit		+25%	+50%

Analysis of sector performance in the US 6 and 12 months after the bottom of		S t P f ec or er ormance 6 Months after Trough	S t P f ec or er ormance 12 Months after Trough
	BEST	Technology 33.7%	Technology 44.0%
		Consumer
the market. On average the top 4 sectors are:		Di ti scre onary 25.6%	C Di ti onsumer scre onary 33.4%
		Financials 24.9%	Financials 32.8%
		Industrials	Industrials
• Technology • Consumer Discretionary • Financials •Industrials		22.6%	30.0%
		World 22.2%	World 29.7%
		Healthcare	Materials
Source: UBS		20 7% .	27 6% .
		Materials 20.2%	Telecoms 27.4%
		Consumer Staples 19.7%	Healthcare 26.5%
		Telecoms 19.0%	Consumer Staples 26.3%
		Utilities 15.0%	Utilities 24.6%
	WORST	Energy 14.7%	Energy 23.1%

Disclaimer

This presentation has been prepared for use in conjunction with a verbal presentation and should be read in that context.

Information for the graphs, charts and quoted indices contained in this presentation has been sourced from IRESS Market Technology and WAM Capital Ltd, Wilson Investment Fund Ltd and WAM Active Limited.

The information in this presentation is only intended for Australian residents.

The presentation purpose is only to provide information and does not purport to give investment advice. We strongly suggest that investors consult a financial adviser prior to making any investment decision.

The presentation does not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making investment, financial or other decisions. The information is selective and ma y not be com p lete or accurate for y our p articular p ur p oses and should not be construed as a recommendation to invest in any particular investment or security, or Fund offered by Wilson Asset Management.

The information provided in the presentation is given in good faith and is believed to be accurate at the time of compilation. Neither Wilson Asset Management nor its director or employees make any representation or warranty as to the accuracy, reliability, timeliness or completeness of the information. To the extent permissible by law, Wilson Asset Management and its director and employees disclaim all liability (whether arising in contract, tort, negligence or otherwise) for any error, omission , loss or damage (whether direct , indirect , consequential or otherwise) . Performance figures quoted in the report are past performance. Past performance is not an indicator of future performance. Neither Wilson Asset Management nor its director or employees guarantee or make any representation as to the performance of the Funds, the maintenance or repayment of capital, the price at which shares may trade or any particular rate of return.

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© Wilson Asset Management Pty Ltd 2008