WAM DEBUTS AFTER RECORD $394M FLOAT
Written on the 30 May 2016
WAM Leaders (ASX:WLE) began trading on the ASX today after setting an equity capital markets record for a listed investment company (LIC) by raising $394.3 million through an IPO.
The IPO, which attracted close to 10,000 shareholders, broke the LIC record set last year by the Magellan Global Equities Fund which raised $378 million.
However, the shares failed to trade above their $1.10 issue price on debut today, settling around $1.06 and trading as high as $1.09. With the price of the options included, the combined value of the shares reached as high as $1.12.
Geoff Wilson, the chair of WAM leaders and founder of Wilson Asset Management, says he was delighted with the IPO result and welcomed shareholders to the register.
"From day one, we were overwhelmed with strong demand from investors, particularly from existing shareholders in our other LICs: WAM Capital Limited, WAM Research Limited and WAM Active Limited," says Wilson.
Wilson says WAM Leaders will provide shareholders with a rare opportunity to gain exposure to the ASX 200 with the new company targeting undervalued large-cap corporations with a view to capturing capital growth, providing a franked dividend stream and maintaining a focus on capital preservation.
WAM Leaders says it will invest using Wilson Asset Management's absolute bias, bottom-up, fundamental investment methodology. Like WAM Capital Limited, WAM Research Limited and WAM Active Limited, WAM Leaders will default to cash and invest only in opportunities that provide strong risk-adjusted returns.
WAM Leaders issued shares at $1.10, each with an attaching bonus option to acquire one additional share, exercisable at $1.10 per option on or before the closing date.
The $374 million target, which consisted of $165 million in oversubscriptions, was exhausted and led the board to lodge a supplementary prospectus to allow the company to raise an additional $33 million, bringing the IPO to $407 million.
Director Chris Stott says from looking at the IPO success, the company is poised to commence operations in a strong position.
"Large funds under management ensures the relevance of the company in the market, which can increase investment opportunities," says Stott. "It also has the benefit of lower fixed administration costs as a percentage of assets and greater liquidity for investors."
Wilson Asset Management's largest LIC, WAM Capital, has achieved on average 17.9 per cent performance each year since its inception in 1999, outperforming the S&P/ASX All Ordinaries Accumulation Index by 10.1 per cent per annum.