WAM ACTIVE LIMITED — Investor Presentation 2012

May 6, 2012

WAM Active Limited (WAA)

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Executive summary

• Investment Portfolio has outperformed by 7.6% financial year to 31 March 2012

• A it i hti 51% verage equ y we g ng

• 12.5% increase in fully franked interim dividend to 4.5 cents per share

• Annualised fully franked dividend yield 8.3%*

• Bonus O tion issue on a 1 for 1 basis – ASX Code: WAAO p

• Exercise at $1.08 at any time to 12 December 2013

• Cautiously optimistic on Australian equity market

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• Based on 3 May 2012 closing price

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Strategic direction

• Board’s commitment to grow the market capitalisation from its current levels of $18m to $100m throu g h various ca p ital mana g ement initiatives ( o p tion issue )

• Continue to achieve outperformance through investment objectives: � To preserve capital in both the short term and long term; and � Deliver investors a growing income stream in the form of fully franked dividends.

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Option issue

• Bonus option issue on a 1 for 1 basis

• Exercise price: $1.08

• C i t ti til 12 D ecem b er 2013 an exerc se a any me up un

• Options trade on the ASX under the code “WAAO”

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Option issue Frequently asked questions

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Why?

• Create value for all shareholders

• Increase size of Company - making it more relevant

• Continue to grow the Company

• ’

• • L ower th e ompany s managemen expense ra C t ti o (MER)

How will the money be invested?

• In accordance with the existing Market Driven investment process

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Consistent outperformance

	Performance 1 Yr 2 Yrs 3 Yrs Since Inception	Performance 1 Yr 2 Yrs 3 Yrs Since Inception	Performance 1 Yr 2 Yrs 3 Yrs Since Inception	Performance 1 Yr 2 Yrs 3 Yrs Since Inception	Performance 1 Yr 2 Yrs 3 Yrs Since Inception	Performance 1 Yr 2 Yrs 3 Yrs Since Inception
	Performance	1 Yr	2 Yrs	3 Yrs	Since Inception
	as at 31 March 2012	%	%pa	%pa	(Jan-08) %pa
	WAA Investment Portfolio	+4.6%	+6.3%	+20.3%	+12.1%
	S&P/ASX All Ordinaries Accumulation Index	-6.2%	-0.9%	+12.3%	-4.3%
	Outperformance	+10.8%	+7.2%	+8.0%	+16.4%

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Performance Financial Year 31 March 2012

	WAA Investment Portfolio +6.1% WAA Pre-tax NTAper sharegrowthplus dividends +3.0%
	WAA Share price growth plus dividends +11.7%
	S&P/ASX All Ordinaries Accumulation Index -1.5%

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Outperformance since inception

WAM Active has outperformed the market by 16.4% p.a. over 4¼ years

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Index re-based
80
60
40
20
0
-20
-40
-60
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WAM Active Ltd - Investment Portfolio (before all expenses, fees, taxes and dividends) S&P/ASX All Ordinaries Accumulation Index

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Premium / Discount to NTA

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30%
20 %
10%
0%
‐10%
‐20%
‐30%
2008 2009 2010 2011 2012
m
u
nt / Premi
u
Disco
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*To 20 April 2012

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Dividend growth

cents per share

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10.0
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 2011/12
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Fully franked dividends

• Annualised interim dividend

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Contributors / Detractors

	Best Performing Stocks Financial Year to 31 March 2012 Company Strategy Unrealised/ Rlid Gi	Best Performing Stocks Financial Year to 31 March 2012 Company Strategy Unrealised/ Rlid Gi	Best Performing Stocks Financial Year to 31 March 2012 Company Strategy Unrealised/ Rlid Gi	Best Performing Stocks Financial Year to 31 March 2012 Company Strategy Unrealised/ Rlid Gi
	Best Performing Stocks Financial Year to 31 March 2012
	Company	Strategy	Unrealised/ Rlid Gi
			ease ans
	SGI Signature Capital Investments Ltd	LIC Discount to NTA	$285,946
	ILF ING Real Estate Community Living Group	Discount to NTA	$117,369
	CCQ Contango Capital Partners Ltd	LIC Discount to NTA	$99,509

	Worst Performing Stocks Financial Year to 31 March 2012
	Company	Strategy	Unrealised/ Realised Gains
	SYM S H ldi Ltd ymex o ngs	Bl k T d oc ra e	($161 107) ,
	AUN Austar United Communications Ltd	Takeover	($144,313)
	TEN Ten Network Holdins Ltd	Oversoldposition	($68644)
	g		,

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Top 10 Stocks as at 31 March 2012

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	Company % Gross Assets	Company % Gross Assets	Company % Gross Assets
	Company % Gross Assets
	CCQ Contango Capital Partners Limited 2.9% ILF ING Real Estate Community Living Group 2.3%
	EPX Ethane Pipeline Income Fund 2.2% AIX Australian Infrastructure Fund 2.1%
	SDG Sunland Group Limited 2 1% . GFF Goodman Fielder Limited 2.0% EGP Echo Entertainment GroupLimited 2.0%
	BSL Bluescope Steel Limited 2.0% CYG Coventry Group Limited 1.9%
	VAH Virgin Australia Holdings Limited 1.8%

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Market Driven strategy

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Number of trades
Financial Year to 20 April 2012
Turnover of
6.8 times or 680%
invested equity:
Number of trades: 2,183
Individual stocks
254
traded:
Takeovers: 37
Placements: 53
Short Sales: 24
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Australian Infrastructure Fund (AIX)

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• Idea generated through an industry peer

• Visited the com an to understand the com anies strate p y p gy

• NTA: $2.91 vs share price of $2.20

• Catalysts: management committed to close NTA discount, strategic review, management internalisation and asset sales

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ING Real Estate Community Living Group (ILF)

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• Started buying below $0.10. Idea generated by analyst stock screen of stocks trading below NTA

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• Managing Director previously at Aevum which we successfully owned in the past, rate highly

• S evera one on one mee l ti ith t t o un d ers an t d t t d ngs w managemen s ra egy an

• identify catalysts

• Catalysts included asset sales accretive to NTA, recommencement of dividends and the internalisation of management

• NTA: $0.33 vs current share price $0.20

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Did you know?... Facebook

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• Valuation IPO: $77 - $96 billion

• P/E: 93 - 117x

• 901 m illi on mem b ers or 13% o f th l b l l ti on an d i e g o a popu a grow ng

• Every member is worth $85 - $107 to Facebook

• Each member generates $4.69 in revenue and around 91 cents in profit p.a

• CEO and founder 27yr old Mark Zuckerberg estimated wealth of $18.5 - $23bn

• Expected listing date 18 May 2012

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Looking ahead

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•
Continued high level of takeovers
and corporate actions
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•
•
Further short selling opportunities
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Continued low level of capital
raisings
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•
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Looking ahead

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Source: Credit Suisse strategy

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Summary

• Investment team continue to scour the market for Market Driven opportunities and deliver erformance p

• Board is focused on delivering a rising stream of fully franked dividends

• Cautiously optimistic on Australian equity market

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Questions?

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Additional Information

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Who is Wilson Asset Management?

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• The WAM Group is the fund manager of three listed investment companies and one unlisted fund, with funds under mana g ement of a pp roximatel y $340 million.

• Concentrates on growth companies predominantly in the small to mid cap area of the market

• 3 Listed Funds:

• WAM apital Ltd A C ( S X: WAM )

• WAM Research Ltd (ASX: WAX)

• WAM Active Ltd ( ASX: WAA )

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What Wilson Asset Management delivers

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• Quick decision making

• Bottom up approach

• Sta in ver close to the market and investee com anies y g y p

• Strong risk adjusted returns

• Significant market experience

• Closed end fund - avoiding being forced seller and buyer at inappropriate times

• Actively managed portfolio

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The Team

Geoff Wilson - Chairman / Portfolio Manager Kate Thorley - CEO & Company Secretary Chris Stott - CIO / Portfolio Manager Matt Haupt Equity Analyst Martin Hickson - Analyst / Dealer Mark Tobin - Assistant Analyst Linda Vo - Senior Financial Accountant Lillie Johnson - Accountant Mary-Ann Baldock - Office Manager

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Our Business Model

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Investment Focus –
Growth Companies
LIC Structure + Experienced
Benefits Team
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 Research WAM Active
(WAX) (WAA)
Research Market
Driven Driven
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Investment process “ Market Driven”

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We scour the market for opportunities:

• Initial public offerings

• Capital raisings

• Block trades

• Oversold positions

• Takeovers

• Listed Investment Companies (LIC) discount to net tangible assets (NTA)

• Stocks trading at a discount to their NTA

• Earnings momentum / surprise

• Short selling

• Market themes and trends

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LICs are superior investment vehicles

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Listed Investment Companies are very attractive investment vehicles

• LICs have outperformed the market[^]

• Studies show LICs outperform managed funds[*^]

• Closed pool of capital – never forced seller or buyer

• P rov id e cons s en i t t fl ow o f f u ll y ran f k e d di v id en d s

• Lower MER compared to managed funds

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

• Trades on the ASX w hich pro v ides intra da y liq u idit y

^ Australian Study: Morgan Stanly Smith Barney

• UK Study: Collins Stewart

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LICs outperform the share market over the long term

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10000
LIC Total Return Index
ASX All Ords Accum
1000
100
79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09
9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0
1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2
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• Source: Morgan Stanley Smith Barney

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WAM Funds outperformance vs ASX LIC Index

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Source: Iress

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External research coverage

Research Houses covering listed investment companies & WAM Active:

• Bell Potter Securities

• Morgan Stanley Smith Barney

• Z en ith P ar ners t

• Independent Investment Research

• APAM LIC Research

• Evans & Partners

• JBWere

• Morningstar

• E.L.&C. Baillieu

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Investor communications

• Website – wamfunds.com.au

• Subscribe for weekly emails – includes market update

• Audio casts – Monthly

• Media – Sky Business, Switzer, CNBC, Newspapers, Industry Magazines

• Half earl Investor Newsletters y y

• Half yearly Results and Media Release

• Attend and present at industry conferences – ASX, AIA & ASA

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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, Credit Suisse Strategy, Morgan Stanley Smith Barney, Collins Stewart, 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 purpose of this presentation is to provide information only and the contents of the presentation does not purport to provide investment advice. We strongly suggest that investors consult a financial adviser prior to making any investment decision.

The p resentation does not take into account the investment ob j ectives , financial situation or p articular needs of an y p erson 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.

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