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WAM Alternative Assets AG (ASX: WMA) is a listed investment company (LIC) that invests in alternative assets.
Most LICs on the ASX invest in ASX stocks or global stocks. But WAM Alternative generally invests in unlisted companies and assets.
LIC’s slogan is that it invests in “unique opportunities beyond traditional assets”.
At the end of June 2022, WAM Alternative Assets had gross assets of $243.4 million.
What are the portfolio investments?
Looking first at asset class exposure, there are four areas where the LIC has money allocated.
As of June 30, 2022, it held 41.4% of the portfolio in “real” assets, 25.7% in private equity, 5.5% in real estate and 27.4% in cash.
The LIC provides a bit of color on what each of these segments actually means.
Real assets are a “diversified portfolio combining agricultural assets and investments in perpetual water rights that can be sold or leased to irrigators to generate income”.
Water rights in the “real assets” segment accounted for 35.4% of total assets.
Private equity is a “diversified portfolio of unlisted companies with the potential for long-term and accelerated growth”.
Real estate refers to a portfolio of national and international industrial office assets.
Talk to Live CableWAM Alternative Assets portfolio manager Dania Zinurova said it’s hard for ordinary investors to access these types of assets, but an investment vehicle like this LIC “democratizes alternative investing for retail investors.
LIC’s strategy is to invest “thematically” and focus on four key megatrend areas. These are essentially just trends, but they are strong and/or long term.
These four priority areas are: a growing aging population, climate change, digitalization and increasing demand for food.
Zinurova told Livewire what the investment team is looking for with these trends:
Within these megatrends, we look for strategies supported by strong long-term tailwinds and apply a holistic approach to portfolio construction rather than following rigid strategic asset allocation targets.
Let’s take a look at some of the largest holdings in the WAM Alternative Assets portfolio.
WAM describes the Argyle Water Fund as Australia’s leading non-irrigator water investor.
Another “real asset” is the Strategic Australian Agriculture Fund, which invests in Australian water rights, Australian farmland and associated businesses, and Australian agricultural infrastructure.
Discussing the Argyle Water Fund, Zinurova told Livewire:
Since the returns of this asset class are determined by a risk premium (i.e. weather conditions) that differs from the risk premium of public equities, it provides valuable diversification to a portfolio of investors. ‘investment.
However, the goal is to reduce the water allocation to between 15% and 20% of the portfolio over time.
Next, let’s move on to private equity.
One investment is Birch Waite, a maker of premium condiments, desserts and drinks. Another example is aCommerce, a provider of outsourced e-commerce solutions in Southeast Asia.
Shopper is another investment, which is Australia’s ‘fastest offline media company’. Next is esVolta, a developer of utility-scale battery energy storage projects in the United States.
The final example is GMHotels, which owns and operates a portfolio of hotel assets in Australia.
Finally, looking at some real estate examples, there is the Revesby Industrial Income Fund in NSW and a property in Manhattan, New York at 2 Rector Street.
WAM Alternative Assets Share Price Overview
Over the past month, WAM Alternative Assets stock has risen around 4%.