WAM ACTIVE LIMITED — Investor Presentation 2011

May 18, 2011

WAM Active Limited (WAA) Investor Presentation May 2011

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Small Cap Value

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Mid to Small Cap Sector Benefits

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• Small cap value has outperformed all other sectors[*]

• Under researched – the market valuation is inefficient

• Access to management - ability to build strong relationships

• Life cycle of the business – ability to grow at a faster rate than larger companies

• Higher risk and higher returns

• More takeover activity

LIC Structure Benefits

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Listed Investment Company’s are very attractive investment vehicles

• Studies show LICs outperform managed funds[*]

• Closed pool of capital – never forced seller or buyer

• Provide consistent flow of fully franked dividends

• Lower MER compared to managed funds

• Provide opportunities – can trade at a premium/discount to assets

• Trades on the ASX which provides intra-day liquidity

Our Experienced Team

• Geoff Wilson - Chairman and Portfolio Manager

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• Chris Stott - CIO and Portfolio Manager, previously Head of Research

• Kate Thorley - CEO of Wilson Asset Management. Kate was previously our CFO and remains Company Secretary for WAM, WAX and WAA.

• Matthew Kidman to step down from day to day activities to pursue other interests at the end of June.

Matthew will remain on the Boards of WAM, WAX and WAA

• Martin Hickson - Analyst/Dealer, focus on Market Driven investments

• Matt Haupt - Research Analyst, CFA with 6 years experience as a Portfolio Manager and Analyst, focus on Research Driven investments

Investment Process

“Market Driven”

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We scour the market for trading opportunities. These could include participating in:

• initial public offerings

• placements

• block trades

• rights issues

• corporate transactions (such as takeovers, mergers, schemes of arrangements, corporate spin-offs, restructurings)

• arbitrage opportunities

• LIC discount arbitrages or relative value arbitrages

• markets themes and trends

The portfolio is traded actively/high turnover

Business Model

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Small to medium Listed Company
Investment focus
LIC
+ Experienced
Structure
team
benefits
Investment + Flexible + Tight cost
Process Mandate control
Superior long term
=
performance record
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Our Funds

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WAM Capital
(WAM)
WAM Active WAM
(WAA) Research
(WAX)
Market Research
Driven Driven
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Performance Financial Year to Date to 30 April 2011

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Gross Portfolio 15.9% Pre-tax NTA per share growth plus dividends 6.8% Share price growth plus dividends 15.4%

Performance since Inception

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WAA +15.0% p.a. – outperformed by 18.8% p.a. over 3.25 years

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80
60
40
20
‐
‐20
‐40
‐60
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WAA Gross Portfolio All Ordinaries Accumulation Index

Top 10 Stocks as at 17 May 2011

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Company	Company	% Gross Assets
SGI	Signature Capital Investments Ltd	5.2%
MSF	Maryborough Sugar Factory Ltd (The)	2.8%
TLS	Telstra Corporation Ltd	2.8%
AUN	Austar United Communications Ltd	2.7%
CCP	Credit Corp Group Ltd	2.6%
WTF	Wotif.com Holdings Ltd	1.7%
SPL	Starpharma Holdings Ltd	1.5%
CCQ	Contango Capital Partners Ltd	1.5%
SYM	Symex Holdings Ltd	1.4%
RHG	RHG Ltd	1.1%

Village Roadshow Ltd (VRL)

Long Trade

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• Pricing environment more attractive

• Selling assets to pay down debt

• Corporate overhead restructure

• Capital management

• PE: 8x

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Leighton Holdings Ltd (LEI)

Short Sale

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• Large profit downgrade, profit of $480m to loss of $427m

• 1 for 9 rights issue to raise $757m

• Institutional bookbuild of rights, price of $24.50

• Believed stock would be under pressure

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RHG Ltd Update

• We took action because we believed our capital was at risk

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• RHG action was the exception and not the rule

• Our focus is to manage shareholders money

• We actively pursued a change of the Board to protect the value of our investment, to keep the company listed on the stock exchange and to make money for our shareholders

• As at 30 June 2011, we estimate $0.40c of cash plus $4 billion mortgage book in run-off. Mortgage book is valued at approximately $0.20c a share

• Since our intervention, RHG has paid a 79c fully franked dividend and has announced it’s intention to liquidate within 18 months

• We expect further fully franked dividends

Dividends

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cents per share

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9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2008/09 2009/10 2010/11
Ordinary fully franked dividend
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Dividends

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• The Board is committed to paying an increasing stream of fully franked dividends

• Government reform in June 2010 has changed the way dividends are paid

• Dividends paid if the company is solvent

• WAM Active has franking credits of 8.3 cents per share as of 30 April 2011

Capital Management

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• Board’s focus is to grow the market capitalisation to $100m within 5 years continues

• 288,792 WAA options exercised since April 2010 for $332,420

• The balance of WAA Options 15,200,427 lapsed 30 April 2011

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Market Outlook

Australian Retail Sales

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Private Sector Credit Growth

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S&P/ASX 200 Performance

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Analyst EPS Forecasts

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Current Issues

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�	Australian Dollar
�	Carbon Tax
�	Interest Rates
�	Australian Housing Market
�	China

Shareholder Communications

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• New Website – WAMFunds.com.au

• Media – Sky Business, Switzer, CNBC, Newspapers

• Research Reports – Bell Potter, Patersons & Independent Research Reports

• Audio casts – Monthly

• Subscribe for weekly emails

• Bi-annual presentations

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WAM in the Community

Our people are passionate about the well-being of our customers and the wider community because helping others is part of our culture. As part of the WAM in the Community Program, we recently donated to the QLD Premier Disaster Relief Appeal.

We have also proudly supported other various initiatives as below.

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WAM Active Limited (WAA) Investor Presentation May 2011

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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, Macquarie Research, Goldman Sachs, Collins Stewart and WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd unless otherwise stated.

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 may not be complete or accurate for your particular purposes 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, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd nor its directors 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, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd 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, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd nor its directors 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.