Good afternoon and thank you, everyone, for joining the WAM Strategic Value Full Year 2025 Q&A Webinar. Myself, as the Chairman of the company and also the lead Portfolio Manager, Marty McCathie, who is an Investment Specialist, helps us on the portfolio construction, and Olivia Harris, who's from our comms area, will be on the webinar. She'll be moderating your questions. As you know, this is your company. We're in a very good position that we can manage this pool of capital on your behalf. As it's your company, we have these webinars on a six-monthly basis, so you can ask us any questions you want. If your question isn't answered to your satisfaction here, please contact us afterwards. If you have any other questions, comments, or thoughts, please send them in. One thing I do like about the WAM Strategic Value shareholders, they're always very good at asking questions, and they're high-quality questions. The questions you've already sent in today are of that similar style. I'll go through the first part of the presentation, then I'll pass to Marty, and then we'll open it up for Q&A with Olivia at the end. In terms of the last 12 months, what would I give WAM Strategic Value in terms of a result over the period? It was a solid performance. The portfolio was up a little over 8%. We did have some positions that had turned into cash, Global Data Centre, which was a very successful investment for us. Sometimes it takes a period of time to receive that cash. When we're sitting with high levels of cash, it takes a period of time to deploy that cash at the right price, buying a dollar of assets for AUD 0.80 or less. In terms of how we're sitting at the moment, and at the start of the 2025-2026 year, we think we're really well positioned. We've got nearly 28% cash, and we are building positions and looking for opportunities. A few people have sent in some questions about a couple of the positions we've got. There's been a bit of activity that we've been involved in, and we'll go through that in a little bit more detail towards the end of the... Probably it'll be flushed out a little bit more in Q&A. One of the interesting things, and we put this in the full-year result, was just how the portfolio, even though the portfolio performance was less than the market over the period, obviously adjusting for the cash, it gets a lot closer to the market. The other interesting thing is how the portfolio performed in down periods. It is a very solid portfolio. We think it's taking on less risk than the market. Even so far, month to date, as the Australian market's down, we've been outperforming and the portfolio is up a little bit. In terms of the actual NTA, currently the share price is trading at a discount to NTA. Our view is that we will get it to NTA if not a premium. That just takes time in terms of time to tighten up the share register, and we can talk about that a little later in the Q&A. If you look at the cash, it is valued at cash, but the rest of the portfolio, if you look at the look-through value of the portfolio, and it was really from yourselves, shareholders, asking us if we can work that out for you and provide it to you on a more regular basis. The look-through value of the portfolio as of the end of July is about AUD 1.52. In theory, if all our positions, you know, we're able to sell them at the true value of what they're worth, then we'd have AUD 1.52 of assets. Where should the share price be medium-long term? I actually think in between that AUD 1.26, and that's the AUD 1.26 is the NTA at the end of July, in between that AUD 1.26 and the AUD 1.52. As more asset positions or more investment positions get realized, then obviously, yeah, we'll take the money out and invest in additional undervalued opportunities. In terms of going through the portfolio in detail, actually on the various slides, we've even got the performance slide, and that showed you how we performed in the market drawdowns. To me, if we flip to the slide showing the listed investment companies, there's about 90 of them at the moment, but showing the premiums and discounts, to me, that's an interesting slide. Of our nine listed investment companies, that's Wilson Asset Management, four or five of them are trading at NTA, if not premiums. The others, we believe will trade at NTA over time. One of our bigger positions in the portfolio was when we had a big position in Templeton Global. When it was taken over by WAM Global, we rolled into, with the takeover, we rolled into WAM Global. We had an option of taking cash or taking WAM Global shares. There was actually a 6% benefit by taking WAM Global shares. As you know, anyone who's been on one of these webinars before would know that because WAM Global is charging a management fee, we actually don't charge a management fee on that investment. You may or may not have seen, we announced just a little earlier today that we are not a substantial shareholder. We've gone under... WAM Strategic Value has gone under 5% of WAM Global. WAM Global's trading around NTA. Go back about a year ago, it was trading about an 18% discount. Our communications engagement team had been working hard on that in terms of getting the story out. That share portfolio had continued to tighten, and now it's moved back to where it was. Effectively, it was trading at a premium NTA when it made the bid for Templeton. It's taken a few years for it to get back to NTA, and we expect it more. The reason we've held on over that period of time is because we had confidence that we'll trade at NTA if not a premium. In terms of WAM Strategic Value, that's one of our two LICs that are trading around that 10% odd discount. All the others are less of a discount if not premiums. We expect over time that we'll get that trading, as I said before, at NTA if not a premium. In terms of the chart that shows you the listed investment company sector, just the ones that are trading at premiums and discounts, you find the larger LICs on average trade closer to NTA. The very small LICs you'll see in that chart tend to trade at discounts. The function of that is probably they don't have the resources to clearly articulate their message and communicate with their shareholders and market to other shareholders. We have about 14 or 15 people. Our cost is AUD 3 million- AUD 4 million to provide that for shareholders. Obviously, the two LICs that are trading at, the two largest LICs, AFIC and Argo, are trading at discounts, which is over time, it's a bit of an anomaly. The various other slides, we've shown you the growth in the LIC sector, how many are there. It does go through periods of expansion and contraction like any market. There's rationalization, and that's good for markets. What I might do is pass over to Marty now, who'll take you through the next part of the presentation, and then we'll come back to probably myself before we go to Olivia for Q&A. Thanks, Marty. Yeah, thanks, Geoff, and good afternoon, everybody. Maybe just jumping back a slide, obviously we were touching on there the growth in the LIC sector. It has been pleasing to see, obviously, the market capitalization in the sector continue to trend up with performance, but also six new issuance in the LIC, LIT space over the last 12 months or calendar year to date. Largely private debt products, and I'm sure private debt will be a question at some point in time. It is nice seeing that the closed-ended structure being utilized and new products coming to market. If we jump onto the next slide, just looking at our portfolio composition within the different, I guess, asset classes, if you want to call them that, within the LIC and LIT landscape. Maybe just everybody will have seen this slide, but just kind of looking at it from a different angle, I was asked a question yesterday from a financial advisor: what is the optimal output here? When we're constructing the portfolio and looking at investment ideas, what do we want this slide to look like, and what is the makeup of the portfolio? For Geoff and the team, when we're looking at constructing the portfolio, it really is bottom-up. We're really looking at the best ideas, discounts, what the catalyst is for those discounts, and how we think we'll extract value for investors. The output of that, which is this slide here, is really a byproduct of the opportunity set. At the moment, we're sitting with around about 55%, slightly less, intra-month. At the end of June, we're about 55% in global LICs and LITs. For us, that was a happy hunting area a couple of years ago. Over the last couple of years, we've had really strong performance from global equities, and we've also had a narrowing of share price premiums and share price discounts in some cases. Geoff's already touched on WAM Global being a beneficiary there. Looking at the other sections, direct assets is a much smaller part of the portfolio. We often get questions on why do you have direct assets in the portfolio. Global Data Centre was a big piece of that. Direct assets was a much larger part of our portfolio if we go back 12 months ago. GDC has been a great example of us investing in a portfolio that was in windup. We're able to, or the manager was able to, realize significantly more than carrying value. Given we bought the assets at a discount to NTA, we were able to get the uplift of assets as they were selling them in a favorable market, but also the closing of that discount as capital was returned to shareholders. A good example, I think, of why direct assets form part of the portfolio. The other element there, cash, obviously we're sitting on at the end of June, 15.8% cash. As we sit today live, slightly larger than that. We have been selling some of the investments that are at or close to NTA parity. We've also got, as we said, still a small residual position in GDC, which is effectively cash within the vehicle waiting to be returned. Live cash is a lot closer to 20%. We are deploying capital selectively, and I'm sure we'll talk on some of the opportunities that we see in the market. With equity markets at all-time highs and markets showing a bit of weakness over the last little bit, have been really rigid in our investment process and selective on the opportunities that we are taking. If we touch on the next slide and jump onto the next one and look at some of those opportunities, Geoff's already touched on WAM Global. Kind of going from left to right, I might touch on Platinum Asia, and then Geoff, I'll let you talk on Pengana and Platinum Capital. With Platinum Asia, for us, it was a modest position in the portfolio, but one that we were able to take and build our position as we got comfort in the catalyst of that discount narrowing. The catalyst was the board conducting a strategic review of sorts and deciding that it was in shareholders' best interests to convert the listed company into an active ETF. What that allowed shareholders was the opportunity to convert their holding in the listed investment company at NTA parity into an ETF, and subsequently, if they wanted to exit that investment on market with liquidity from a market maker. That scheme of arrangement transaction occurred in the last couple of weeks, last week. We were issued stock on the 26th of August, and we've subsequently sold that one. For us, we made a reasonable return there and positive performance from the underlying manager in the period we held it, and that discount being eradicated through the scheme of arrangements. Geoff, did you want to touch on maybe Pengana first and then Platinum? Just go through that order? Yeah, no, good idea. Let's do Platinum first and just do them in the order that they've occurred. Actually, probably the other one is the order in terms of the size of the portfolio. Pengana is more important to the portfolio than Platinum. As Marty said, both Platinum vehicles, the listed investment companies, we had positions in them. At various points in time, we do trade positions. We're very happy to take a position and then, if the discount disappears, sell it, or if it's more a trading opportunity, take it at a big discount to NTA and then trade it out. Probably a few people might realize that we are a bit more active than it may appear on the surface. I know there's a question that came in about Perpetual, and I think Marty, you're going to talk about their listed investment company, you're going to talk about one of their equity listed investment companies a little later. Another one that we've been trading recently is Affear. There's someone that was looking for liquidity, had to sell stock. We bought it at about a 3% discount to the actual share price, which was close to a 14% discount to NTA. Actually, we've traded most of it out and made, I think we put in about AUD 15 million and we've taken out, yeah, we made about a 6% turn on that. In terms of Platinum, Platinum Capital, the story there is, as Marty said, that obviously the independent board had decided what was in the best interests of all shareholders was to give all shareholders a liquidity opportunity. You'd be aware that Platinum, the management company, is in the process of being taken over by another fund management company, L1. L1 ended up taking a strategic stake in Platinum Capital. They've built that up to about 99%. They are saying that they want to keep it as a listed investment company and to manage it a certain way. We actually asked the company for a copy of their list of shareholders. Then we did some analysis on it and ran it through looking at our 130,000 odd shareholders, which were similar. Over 36% of our shareholders were already Platinum shareholders. We thought, let's stand up for Platinum shareholders. We contacted the board and communicated our displeasure about what was happening. Broadly, to me, it's a little bit illogical. L1's taken over the manager of Platinum, and they're trying to change the management agreement by an AGM of Platinum Capital. Now, because they're taking over the manager, then by default, they would be managing the pool of capital that Platinum Capital have. Why do they want to change the management agreement? It could only be, from our perspective, to get significantly higher fees. Now, currently, shareholders in Platinum Capital, they pay about a 1.1% management fee, and they pay a performance fee, which is significantly underwater. It's actually nearly AUD 315 million underwater. What L1's proposal is, is to charge a higher management fee, which is nearly 30% higher, and actually to wipe out that underperformance. Starting to get a payer performance fee from when they take over on any positive performance. We thought, hey, look, we've just got to stand up for our shareholders here. We put a proposal to the company, to the board, and please, if you are a PMC shareholder, please vote for, vote against the L1 nominees and vote for our nominees. That AGM is coming up on October. Is it the October 1st or? 1st, yeah. Yeah, and the Pengana one is on October 10. That's pretty much the logic. We said, look, we'll come in and manage the portfolio, and we'll manage it on the same terms that shareholders that have been long-suffering shareholders in there, on the same terms. Effectively, a 1.1% management fee. We will accept the significant underperformance, or we will not get a performance fee until we make back that AUD 315 million of underperformance. That's significant underperformance because it's less than a AUD 500 million company. That's our proposal there. In terms of where it's trading at the moment, it's trading at about a 5% discount. We've just got a very small position. We had a lot larger position. There were opportunities to sell out at a good price, so we did that. Actually, if it ends up trading a lot closer to the pre-tax NTA, then we'll have no concerns about selling out. If you're staying on as a shareholder, please vote for us. The other one is Pengana. I know it's come through with a number of questions, but let's deal with it here. That's a lot bigger position in the WAM portfolio. We've actually been shareholders in the company since it was Hunter Hall Global. Back in the old days, if anyone remembers it, it actually was an ethical investor. I'm actually not sure if it's still, is it still ethical? Okay, it's got it, or it has ethical filters. They don't market that very, very much, I don't think. What happened there is, back in 2017, 2018, when Peter Hall left and he sold the business to Pengana, we actually called an AGM and said, look, shareholders should get the opportunity to get out at close to NTA because the investment strategy is changing. The AGM was narrowly defeated. Pengana then took over the management of it. They managed it in-house. The people managing the portfolio, I think they moved on. Pengana decided to outsource it to another manager, which is probably another reason they should have allowed people to get out at NTA or close to NTA then, which they didn't. Now what they're doing is they're changing, they're putting another set of assets in there, and they're gearing those assets up. They're also going to monthly income payments, which are monthly dividends, which we think is positive. The negative part is they're changing the risk profile for all investors. They are asking, the good thing is they're asking investors to vote on this. That vote's coming up as well. If you could vote against, we think against the change in how the money will be managed. Also, if you can vote against, they've got one director up for election. We've got four directors up for election. Two are actually at Wilson Asset Management, myself, and I'm up on the Platinum one as well, myself and Jesse Hamilton with Pengana, and then two other independent directors. Things are happening. I think both of them, there'll be, obviously, let's see what happens at the shareholder meeting. I suppose, like any election, every vote counts. We think what we're doing is in shareholders' interests in both instances. Actually, the interesting thing is with Pengana, when we ran the numbers on the shareholder crossover, it was over 44% of shareholders are similar to our shareholders. We think, from our perspective, we're standing up for our shareholders, probably like we've done back in 2017, 2018, on franking credits and more recently on taxing unrealized gains, things that we think are not in everyone's interest. Marty, that probably covers off that. Do we have much else to, or do we go to Olivia now for Q&A, I think? Let's go to Olivia. Yeah. Thanks, Geoff, and thanks to everybody for sending in your questions. I want to start with a question from, we've got the same question from Derek, Rom, Alan, Brendan, Eric, and David, and that's about the share price currently trading below the listing price. What is planned to get the share price to at least the IPO price of AUD 1.25? Why has it remained that low, and would you consider giving shareholders back their money at NTA? Yeah, I mean, that's an option. The option is giving shareholders back their money at NTA, which is effectively AUD 1.26. The value of the assets that we own is, as I mentioned earlier, at the end of July was AUD 1.52. That is always an option. From our perspective, and you've seen it as shareholders, you've seen it with WAM Global that has gone from an 18% discount at trading at NTA in a relatively short period of time. That is possible. Also, you'll see with whether it's WAM Capital, whether it's WAM Research, a number of the other WAM entities are trading at reasonable premiums to NTA. Probably the best one to use as an example is WAM Research, which took us the longest period of time to get that trading at NTA. It actually took us seven years. Why does a share or an LIC trade at NTA? NTA is equilibrium. When there's enough buying and enough selling for that to be reached. Effectively, when it's trading at a discount of NTA, it's because shareholders are underlined with the strategy that the manager's adopting. They're prepared to sell their assets below what they're worth. That's where we are with WAM Strategic. In the early days, when we actually floated WAM Strategic, it went to, I think, a 10% premium very early. I think what happened is part of it going to the premium is a function of why it's at a discount now. A lot of people bought shares expecting that after we floated, two or three of our investments were bid for or decided to give the money back at NTA. I think people thought that that was going to happen on an incredibly regular basis. Anyone who's been investing at the closed-end pool of capital market knows that it takes quite a period of time. I think our Templeton Global position, I think we built that up over 15 years. Various other positions, I mentioned the Pengana position, which we've held for more than eight or so years. In terms of holding positions for long periods of time, if you're buying them a dollar of assets at AUD 0.80 or AUD 0.85, then it makes sense. Back on how will this trade at NTA, effectively, we need to continue to tighten up the share register, continue to communicate with shareholders. WAR and WMI are the two LICs on our list that are trading at those 10% odd discounts. That's effectively the shareholder engagement marketing team's total focus, helping them trade at close to NTA, if not at a premium. How does that happen? Effectively, as the people that aren't happy sell, and the people that understand what the company is doing and are happy with what the company is doing and want to get exposure to what the company is doing, buy. It is supply-demand, very easy to say, very hard to do. You'll see, the various WAM LICs have taken over 13 other listed investment companies that have failed to eventually trade at NTA, if not a premium. Thank you. I'm confident, as I said a little earlier, where should the share price be sitting? It should definitely be sitting at a premium to NTA because it's quite clear. When you look at the underlying, the see-through portfolio, the underlying assets are around that, a little over that AUD 1.50 mark. Thanks, Geoff. Marty, we'll go to you now. The next question is from Rodney. Why does WAR invest directly in companies such as Lark? Yeah, and look, for us, it's the opportunity set. If we can pick up investments at a discount to NTA, that's obviously our investment mandate. More commonly, it's LICs and LITs. I guess the reason it's more commonly LICs and LITs, we feel like we've got a skill set there. You know, we are an LIC specialist. That's what differentiates us as an investment manager. We are utilizing that skill to extract value for investors. The NTA of an LIC is quite clear, so you've got a lot of confidence on the valuation underpinning the investment. In the case of direct discounts, including Lark, it's about 1.5%- 1.6% of the portfolio at the moment. It's not a large part of the investment portfolio. Obviously, when we had Global Data Centre in there, it was a lot larger, and we've made a lot of money out of that. For us, if we can find good investments, regardless of them being LICs or LITs, trading at a discount to an intrinsic value that we've got confidence in, we will look at the opportunity set. When we look at Lark and where Lark is for us, you know, there's a lot of research on there on Lark as a company. It is trading at a material discount to its whisky portfolio and the whisky under maturation. For us, it was a good brand, a well-regarded global brand with a portfolio of tangible, realizable whisky. Obviously, the dynamic in spirit sales has changed over the last few years. Whisky is no longer the number one selling spirit. They have faced some headwinds, but a new investment team in there looking to turn that around and get the share price tracking the value. You won't often see us take positions in operating companies unless we've got a high level of confidence on the underlying portfolio. For us, it's how we position those, how we size those positions when we take them. Lark is a very small position of the portfolio. It's less than 0.5%. Obviously, if we had a clear catalyst to unlocking that value and we thought the share price would re-rate as it did with GDC, you'd see us building our investment up. For us, we think it's an asymmetrical return. We think there's a lot more upside and not a lot of downside given the NTA or asset backing underpinning your investment thesis. It's a small part of the portfolio, and we would ratchet up if we saw a clear catalyst, I think. Yeah, and another one, I mean, IMP, which we made money on. That's an operating business when assets become cheap. There are periods of time in cycles when, to use an expression they use, the baby gets thrown out with the bathwater. There are some property plays that are discounts to some, I know there's a question on REITs that came in. Maybe we answer that. Yeah, we're happy to buy REITs. Yeah, we're happy. There's another question I think came in on AOF, how we fared there. I was just looking at it a minute ago. There's a REIT. Decided to give all the assets back. In terms of our, you know, I'm pretty sure we've made money. The question is, we haven't sold yet. The last asset they've got, the person that agreed to buy it and paid the deposit has reneged. I actually went and visited that asset last week. Marty, I know you're in Brisbane today. Did you visit it today? I'm staying a couple of doors up from it, so I'll go and visit this afternoon. Yeah, 150 Charlotte Street. I met with some property people, and we like to do detailed due diligence and come up with our own conclusions. We go back to questions there, Olivia. Yep, thanks Geoff and thanks Marty. Marty, sticking with the direct discount holding theme, a question from Trent is, is the low percentage of direct discount holdings in the portfolio indicative of a lack of opportunity or time and research needed to research these types of opportunities? I don't think it's either necessarily. It's just our confidence in the market and taking market risk at this point in time. Obviously, we're sitting on relatively high levels of cash, so the barrier to entry to get into the portfolio for new positions is a little bit higher given where markets are. We need a little bit more confidence, and it's really just the catalyst. What we're looking for to size positions up is clear catalysts where we think we can unlock that intrinsic value. Obviously, it's Geoff, Jesse, and I looking after the WAM Strategic Value portfolio. We do have a broader team, and the equity investment team, we've got 19 investment professionals throughout the team. When they're looking at small mid-cap companies that fit into our portfolio or large-cap companies from the leaders team that fit into our portfolio, there's a lot of information sharing, and we're leveraging that wider investment team. It's not a lack of bandwidth within the team to do the research. It's not necessarily a lack of opportunity set. At this point in the cycle, the barrier to entry to get into the portfolio is a lot higher, and we really want a nice, clear catalyst to unlock that value. There's just nothing at the moment that's ticking both of those boxes that we're willing to go in and size. Thank you, Marty. Sticking with you, the next question is from George. Could you please provide an update on the CD1, CD2, and CD3 investments, including what you think the state of the private equity market is at present in terms of the CD partner funds looking to sell their underlying investments? Yeah, and look, my engagement with the team at CD has been limited. Collectively, the three positions are still a really small percentage of the WAM Strategic Value portfolio. I was just looking at the numbers. It's kind of collectively about 1% of our portfolio, so it's not a big position. For us, discounts are attractive, but liquidity is problematic for us. Getting size and getting liquidity is difficult. The state on the private equity market more broadly, the CD guys have done well. Their investment track record has been strong. Looking at WAM Alternative Assets, which obviously I'm a lot closer with, with Nick sitting with us in Brisbane with me today, what we're seeing in the private equity market in Australia is a lot more deal flow and a lot more transactions. We're seeing that in the Aussie market with capital commitments that we've made being called, so investments being made. The flip side to that is investors are exiting investments well. It has been a bit of a subdued market in private equity, and what we're seeing now is increased deal flow. I would expect that CD1, CD2, and CD3 will start to see exits after a period of which being relatively benign on that front. As we see exits, we've got capital returned to shareholders. Obviously, all three of those vehicles, for anybody that doesn't know, are in wind-down mode. As they exit, investments are looking to return capital to investors. As I said, small part of our portfolio, but there are kind of green shoots coming out of that private equity market and increased transaction and increased velocity. Thanks, Marty. Geoff, we'll go back to you. We have a question from Jeremy and Roger on dividends. Does WAM have any plans to either move to paying monthly distributions or increase the overall returns to investors? Yeah, in terms of the dividend to shareholders, at the moment, I think it's an after-tax, or sorry, a fully franked yield of a little over 5%, which is probably 7.5% on a pre-tax basis, which means in a 12-month period to pay that out and to get a bit of capital growth, then you probably need the portfolio going up that 11% or 12%, 1% management fee. Therefore, there's a bit of capital growth and a bit of income. One of the problems, and we found that with WAM Capital, when we're paying such a high yield, that with WAM Capital, it was at one stage about 10% of assets. Then all your return is, well, if it's fully franked, then that's close to a 13% increase in the value of the portfolio to just pay out that dividend. Effectively, you don't get any capital gain. You want a bit of a combination of the two. I think the board's very cognizant of not pushing the dividend too hard. I think they've done a good job in terms of moving it up as the value of the assets have moved up. That's the dividend. The other question was about monthly, yeah, whether we'd go to monthly or not. You've seen there's a couple of companies, a couple of listed investment companies out there. Sandon's announced they're going to monthly. The Pengana guys are going to monthly. To me, the Pengana team going to monthly, that would be positive. I think there is definitely demand for monthly income. When you're looking at the money in hybrids, there's billions, well, AUD 5 billion a year till probably 2032 coming out of hybrids and looking for a home. Consistent income is important. Obviously, even going to monthly, people have got to realize, well, with equity exposure, they're taking equity risk. With WAM Income Maximizer, it's sort of 40%- 50% debt, and sort of that 60%- 70% equities. That's probably a different proposition. We could do that. In the U.K., you'll see with closed-end funds, probably half of them went from two dividends a year to quarterly dividends. That occurred in Australia, and a number of listed investment companies or listed investment trusts went to quarterly dividends. That really didn't change. It didn't help the discount at all. The big question is, will monthly dividends, will that, yeah, is that the panacea? It's been positive initially for WAM Income Maximizer. I think that's been positive because people are looking for the money that's coming out of hybrids. They're looking at a low-risk exposure. That's why there's been a lot of money going into WAM Income Maximizer. It's pretty much traded at a premium since it listed. We're aware of it, we're watching it closely, and it could be something we consider if we believe that it actually is in shareholders' interest. It costs more money, it probably costs an extra AUD 60,000 or AUD 70,000 a year, so there has to be a benefit on the other side. Thanks very much, Geoff. Sticking with you, Joe has asked for our views on VG1. VG1 has recently changed who oversees the portfolio from Phil King to Paul Moore. As a substantial shareholder, will you be pushing for a PGF in VG1 merger? Okay, it's RG8, I think, has changed to Paul Moore. Anyway, the listed investment company in the Regal Group that's moved to Paul Moore, we see that as a catalyst in terms of Paul with the PM Capital LIC that's already trading at a premium. Paul Moore focusing on another one of the LICs in the Regal camp, I actually think will be positive. For us, that's a catalyst. We're very tempted to buy some more, but we've got a reasonable shareholding there. We think that'll be a catalyst. That also, one of the other positive things, and with VG1, that's the performance has turned around. You notice the buyback. I think they're going for approval to get the buyback going again. The thing is, the buybacks with closed-end funds don't really work unless you've got a lot of marketing communication at the same time. One of the positives is, I know the performance since April has bounced back for that group. You've got Phil King, who's got effectively his full concentration on that. It's not split. The other funds are now under Paul Moore's wing. I mean, could they all merge? Like there's theory to say that you put all the three together. You'd have a stronger voice on pushing that thesis if African Argo, which historically, because of their size, has implied a premium. That's not the case at the moment. From our perspective, any short-term catalysts, we understand what they're doing. We're in constant communication with them. Are we happy shareholders? Maybe that's a bit extreme to say we're happy shareholders. We'd be a lot happier if they're trading at NTA, if not premiums, and we could have sold out and weren't shareholders. Then we could, you know, use the capital elsewhere. Thanks very much, Geoff. The next question is from Richard. Why does the portfolio hold so much cash? Yeah, Marty sort of touched on that. You know, equity markets are at record highs. It takes time for us to build positions. In terms of the hurdle, I think Marty mentioned the hurdle to get into the portfolio with where equity markets are is a lot higher for us now, because we're taking a long-term view, and it takes time to build those positions. That's why we're holding cash. Thanks very much, Geoff. The next question is from David. Do you have any exposure to U.S. stocks? We definitely have exposure to U.S. stocks. I think Marty mentioned earlier, Marty was it 55% of the portfolio's global equities? Yes. Yeah, so, assuming the global equities are by the global indices, you're talking about another 60%- 65% of that portfolio is in US equities. Thanks very much, Geoff. We have a couple of questions on AOF. How has WAR fared in its AOF investment? Do you have any insight into how they intend to offload the remaining property now that the buyer has defaulted? I'll just update you on the buy. Marty, while I'm doing that, you might be able to get the answer to the second part of the question or the first part of the question. In terms of AOF, there's one asset. They've sold all the assets, and they've sold them at reasonable prices. When we bought into AOF, we're buying the assets at a discount. The last asset that's left that was going to be used, it's 150 Charlotte Street. I think they call it the Golden Triangle in terms of the positioning. It's just up from Eagle Street. I think it's near where the new station is. That was going to be used for student accommodation. That was the plan. The choices are to sell it. Unfortunately, the deal of the sale was they wanted vacant possession. I think it's 96% vacant. The choice is, do you try to sell it, sort of fire sale around this price? You probably get, well, around close to the current valuation. The company's announced that. Do you commit some resources, which is a cost, whether it's AUD 20 million- AUD 25 million, and release it? Then it's not a AUD 50 million asset. It's a AUD 90 million- AUD 100 million asset. That's the dilemma for the current board and as a sizable shareholder for us to think through. Just on how WAR has fared on the investment, we're slightly ahead. On the investment, sitting at around a share price of AUD 0.42 today, we have had some distributions along the way. We've had capital returned to us from our initial investment. The NTA that the company published based on a midpoint valuation at the end of last week was AUD 0.47. That is another 10% or 11% upside from here, should we be able to realize NTA. As Geoff said, with a bit of work, we hope we can get a little bit more than that. Based on current share price, we're broadly break-even, made a little bit of money, but still intrinsic value in the investment. We can see that position, which is about a 10% uplift from here on a base case scenario. On a more favorable scenario, working through the asset, rolling our sleeves up and getting involved, potentially a little bit more upside for investors. Thanks, Marty. The next question is from Brian. What is the selection criteria for WAR? Maybe you can talk through the investment process a little bit. Yeah, we initially focus on other closed-end funds. That's listed investment companies or listed investment trusts listed in Australia. We do have flexibility. We can look at New Zealand. We can look offshore. We've focused pretty much here. It's really what we're trying to do, focus on buying assets cheaply when we can see a catalyst that's going to change the valuation and make those assets not be cheap anymore by the share price moving up to the asset value. That can be listed investment companies, listed investment trusts, REITs, property plays, operating businesses. Effectively, 2,000+ listed companies in Australia and effectively globally. As we haven't got the resources globally, we focus on Australia. Thanks very much, Geoff. The next question we will ask is from Eric. Why does WAR continue to hold back paying equal earnings as dividends? Can you talk through the profit reserve process a bit there? Let's put the profit reserve aside. If we did equal earnings as dividends, then we'd actually cut the dividend this year. No, no, no, we wouldn't. It would just be covered, this current dividend. Effectively, to me, the profit reserve—did he specifically, was the question about the profit reserve? The specific question was, let me pull it up. Because the profit reserve is a combination of realized and unrealized profits and not netting off realized and unrealized losses. The profit reserve is an accounting mechanism that allows you to pay dividends. If you have franking, it allows you to pay fully franked dividends. Olivia, was the question about profit reserve? Yeah, it was. He said fund managers seem keen to build up the profits reserve, which reflects in the yield to shareholders. Okay, so just so you understand, profit reserve, probably the best thing is I'll give you an example. Say you have AUD 100 million of assets at June 30. You've got AUD 100 million of assets, and they go up by 50% between June 30 and December. Your balance sheet will be AUD 100 million of assets + AUD 50 million of profit. You can put that in a profit reserve if you want. That's what we do. If the portfolio between December and June comes back to AUD 100 million, that AUD 50 million stays in the profit reserves, but the drop from AUD 150 million- AUD 100 million of assets creates a loss of retained earnings of AUD 50 million. Your balance sheet becomes, at the start of the year, it was AUD 100 million of assets. At the end of the year, you've still got AUD 100 million of assets, but it's made up of AUD 100 million of assets, AUD 50 million in the profit reserve, and AUD 50 million retained losses. You'd say, hold it, you've got a AUD 50 million profit reserve, but you've actually made no money. You've got to net off from the profit reserve any retained losses. The profit reserve is just an accounting function, which allows you to pay dividends. Please, when you look at listed investment companies or any companies, you've got to net the retained earnings or losses out of the profit reserve. That's actually what the real assets, what the real profit is left. Also, you'll find is if you've made a profit, and in that example I gave you, in theory, you've got a AUD 50 million profit, so you could pay a AUD 50 million dividend. The fact is, if you've paid no tax because you've paid no money, you have no franking. There tends to be a lag. The profit has to be made and it has to be realized. There's a lag in terms of when the franking or when the tax is paid and the franking comes in. We try to, as directors, we try to juggle all that and provide shareholders a growing stream of fully franked dividends. Thanks, Geoff. The next question is from Maddie. What is your view on SB2 and what's the purpose of our investment there? SB2, we think is cheap. Yeah, Marty, what percentage of the company have we got at the moment? I can't remember what the last substantial was. One last week, about 15% of the company. Yeah, a lot of the selling has come from how they structured the initial investment. Now, what are they, S.I.V.s, are they? SIV, yeah. Yeah, so with that one, I think the headline discount at the moment is 36%- 37%. Obviously, small caps have had a good run financial year to date. The NTA has grown, share price has lagged, so the discount has widened. About 15% of the portfolio is unlisted investments. I think we always had a bit of a question mark around the valuation. Not that there was anything wrong with it, just could they realize it given they were unlisted? We've done a little bit of work on those investments and have got a bit more comfort around them, which has allowed us to, while selling, unnatural selling has come into us at what we're very confident is a 35% discount based on the valuation of the unlisted and the liquidity in the listed part of the portfolio. When we're talking about barrier to entry for names in the portfolio, it's one out of a 35% discount. There's a fair margin for error. One that we're happy to take, and we think regardless of what happens, we'll be able to make profit for investors. There was a change of substantial bias in the last couple of weeks as we picked up some more stock there. Oh yeah, and actually, just while we're talking about changes of substantial, you'll see that there's, you know, we mentioned earlier today that WAR's sold some WAM Global shares. Also, I've sort of been removed from being involved in the WAR portfolio. As I'm a Director of WAM Global, we don't have to lodge a substantial, effectively, you know, continually lodge substantial. I have nothing to do with the trading in WAM Global, yeah, going forward. Therefore, I've announced a 3Y saying that I've ceased to be involved or associated with that pool of shares. In terms of my WAM Global shares, the ones I owned yesterday, I still own. It's just I'm not associated with the ones in WAR anymore. You'll see, I think it's Geoff Wilson Appendix 3Y. I just noticed it flipped up. We tried to explain it on the first page, but it's not simple. It's not simple, but I think that, as you said, Geoff, the purpose of spinning that out of the IME, the asset is being managed by an independent board committee of the independent directors from WAM Strategic Value. The reason we've spun that investment out of the standard IME is just to remove any potential perceived conflicts of interest as WAM Strategic Value has been trading WAM Global. The rest of the portfolio goes on as normal. That one investment is the independent board committee managing that one outside of the Wilson Asset Management team. Thanks, Marty and Geoff. The next question is from Nava, looking for your views on a couple of companies. Why do we not invest in Climb Capital, Cadence Capital, Australian United, or Diversified Unified? Okay, we did have a big position in Australian United. We don't have it at the moment in terms of trying to find the catalyst. Climb Capital, yeah, I was on the board there, and I helped that get established. I've got a revenue stream from that entity. That would be a conflict of interest from our perspective. We're not that keen on getting involved in there. It's interesting, Cadence Capital is trading at about a 16% discount. I know that's a similar one to Climb. What was the fourth stock? Diversified Unified. DUI. To me, the bigger thing with AUI and DUI is trying to find the catalysts, because if we want to buy discount assets, we can buy AFIC or ARGO, we can buy AUI or DUI, trying to understand the catalyst. When we end up buying the position in AUI, historically, that was just an opportunity to buy, that was a trading position where we could buy the stock very, very cheaply. Do you want to talk about one of our larger, the perpetual position? I know a question came in on that. I might have covered it. I touched it earlier, but I didn't cover it. Yeah, I think we touched on it and we said we'd speak about it, and then we never did. Good to circle back to that one. As Geoff said, Perpetual, and shareholders have seen it in our top 20 quite consistently. I think what doesn't come across from the top 20 is how active we have been behind the scenes. It's one where the share price discount has oscillated quite materially in short periods of time. It has tended to get out to a 10%, in some cases 11%- 12% discount, and then it's narrowed in quite considerably. Today live, it's about 3.5%. In the last couple of weeks, it was trading as close to a 2% discount to NTA. One that we were very active on as the discount got to low teens, kind of 11%- 12% six months ago, we were sitting at 4.9% of the company, and it was about 10% of the WAR investment portfolio. We were just below that change of substantial. Liquidity dried up a little bit, the discount came in, and more recently, we've been a seller of that one. We have been trimming our position, so it's about 8% of our portfolio today, but it's a really good one where you do get those opportunities as the discount widens. There is obviously investor support at points in time, and buying does come, and the discount narrows. It definitely oscillates a lot more than something like an AUI or a DUI where it feels like the discounts there are a little bit entrenched, and the catalyst is a little bit less clear, as Geoff said. Thanks, Marty and Geoff. Geoff, this next question is for you, an interesting one from Trent on smaller LICs. There are some unique smaller LICs that you own in your tail. How do you view these smaller LICs with their lower liquidity and big discounts? How do you recommend that they play their hand? What they have to do is they've got to commit resources in terms of shareholder engagement, communication, and marketing. If you go all the way back, probably 26- 27 years ago, when I floated WAM Capital, we raised a little over AUD 20 million. For the first couple of years, I think the first year we paid out, it was AUD 0.12 a share fully franked on a AUD 1 issue price. The next year was AUD 0.14 a share fully franked on a AUD 1 issue price. Even after two years, we were trading at a 20% discount. Effectively, we moved to a premium in the third year, and that was really after a lot of shareholder engagement and communications. Probably what I learned in those first couple of years, the brokers that helped us raise the money, I was going around visiting them, talking about WAM Capital. What I realized is it was the shareholders that support us who were buying. We sort of became more internally focused in terms of let's focus, make sure now we communicate clearly to our shareholders. Broadly, think of it logically, if everyone who's a shareholder is happy with the investment, then there's no selling. All you need is a little bit of buying for them to trade at NTA, or if not, a premium. That's what they've got to do, those small guys. It's a lot of time and effort, but they have to do that. Otherwise, they'll end up getting taken over by ourselves or someone else or end up giving the money back. Thanks, Geoff. Marty, the next question is for you from Stuart. Is there any interest in investing in private debt trading below NTA? That's a really good question. There isn't a lot of open-ended or closed-ended vehicles with private debt trading at a discount. I guess the opportunity set's not huge there. Obviously, we've seen six new listed investment companies come to market this year outside of WAM Income Maximized. The others have been private debt, and they're all trading at or close to NTA parity, if not a premium. The opportunity set's not huge there. Interesting, kind of on the private debt space, I think we're very cautious of the private debt space, in particular real estate, residential property, mezz finance lending. It's interesting, you know, having Nick, he's a great resource for the broader business, having Nick join us from Willis Tower Watson. When he first allocated capital to private debt, a stat that just blew my mind, there were three private debt managers in Australia. Today, there's over 300. Just the kind of growth in private debt managers, the growth in capital that's being allocated to private debt strategies, I guess at some way along the line, all that capital can't have been committed with the same rigor. A lot of these firms don't have the same level of work experience as one another as things go wrong. We haven't really gone through a credit cycle in the Australian market. I think the private credit market is due for a bit of a shakeup at some point in time. I think what that means is it will present opportunities, and especially in closed-ended products, I think we'll see private debt or private credit, private debt at a discount at a point in time. Maybe if valuations or the discounts are wide enough, we'll step into them. At the moment, there isn't a huge opportunity set of discounts. I think there's probably a bit of pain in that sector to come, would be my assessment. Thanks, Marty. Sticking with you, we have a question from David. Will the collapse of the U.S. bond market affect WAR shares at all? Good question, thank you. Geoff might want to jump in on this one. The kind of the U.S. bond market is obviously, and what's happened there is influencing investor sentiment. We've obviously seen equity markets react to that today, and equity markets sell off today. The kind of indirect implication is investor confidence, investor sentiment, that'll flow into equity markets as well. We could see shareholder sentiment change, see selling, and with selling and volatility comes opportunities. For us, obviously, we're quite conservatively positioned at the moment, sitting on 20% cash. We're looking for a shakeout in the market and opportunities. If we see that, we will obviously look to take advantage of it. Geoff, did you have anything you wanted to add on that one and your views with the volatility over the last day or so? No, that's a fair point. The problem is I've been around too long. I've got a lot of scars on my back in terms of the 1987 crash, the Asian crisis, etc. To me, what we do know is you can't market time, and over time, equity markets go up. From an investment perspective, what we're trying to do is maximize the time when we commit capital. To me, that's probably all I can add. Thanks, Geoff. Sticking with you, the next question is from Gary. In the annual report, the performance fees paid was AUD 3 million. Should Wilson Asset Management charge performance fees when the share price is trading at a discount to NTA? I mean, a fair question, Gary. To me, it's difficult to work out, well, it's not difficult to work anything out, but in terms of the performance fees paid on the underlying performance of the portfolio, which are the assets of the company. In terms of, you know, there have been listed investment companies since I've been investing in the market, which pay their, effectively, their management fee and performance fee on the share prices. The tough thing about a share price is, you know, I mentioned earlier, we had a situation where with WAM Research, which traded at a discount for seven years, so obviously there would have been not much or less fees, and then it went to a 58% premium. To me, that would be as illogical as the other way. If the company was listed or unlisted, sorry, if it was a trust structure, which was unlisted, you get paid on the value of the assets. To me, the risky part is if you're paid on the share price, then I think it brings, you know, it sort of changes the incentive for the manager, which mightn't be in shareholders' best interests. In the end, and you'll see, at one stage there were close to 120 listed investment companies, a number of them being taken over. What do they get taken over at? They get taken over at NTA and what the value of the assets are worth. If they turn into ETFs or something like that, you're getting out at the value of the assets. I mean, we're very confident that this will trade at NTA, if not a premium. I know it's challenging. I've got a big shareholding. Anyone else who's got a shareholding in more, you know, you don't feel as though there's AUD 1.26 of assets, which there are, or there's AUD 1.52 of underlying assets, which there are, when the share price is trading at AUD 1.12. I clearly hear you. Thanks, Geoff. The next question is from Eric. If the funds represent good value, would management be buying shares? It would send a positive sign to the rest of the market. Yeah, I mean, from time to time I do buy shares. I totally agree. From time to time I do buy shares. Yeah, I think there as well, maybe just adding to that, Geoff, is obviously directors, we have to disclose directors' holdings. Obviously, there's been changes to UIs, broader management, we don't have to disclose. The investment from the broader Wilson Asset Management team isn't disclosed. There is significant investment from the broader team along with Geoff. There is support, it's just not disclosed through the ASX because it's not a listing rule requirement. Thanks, Marty. The next question is from Trent. The top five investments seem to be around 60% of the fund. Can you talk through the concentration risk and how you're thinking about this? Yeah, and look, for us, obviously WAM Global is the largest one. It's about 20% in the portfolio. As investors would have seen from the, and Geoff's touched on the changes substantial today, we have been trimming that position. That is coming down. With the top five, top six being 60% of the portfolio, three or four of them are global LICs. Within the positions, they're very diversified portfolios. WAM Global is an example of the largest. There's 50- 60 underlying stocks within that portfolio. Although it's one holding for us on a look-through level, with any LIC or almost LICs, you're getting a very diversified portfolio. From us, if you look at even the global managers we've got in there, very different styles, a very different investment process and investment philosophy, and very different underlying portfolios. There would be limited crossover between a WAM Global, a Pengana, and a VG1, for example, being our top three holdings. Investors and we and our investors are getting a significant look-through diversification there, albeit it looks a little bit more concentrated on a LIC holding level. Thanks, Marty. We have the next question from Dennis. This one's a little bit generic. Do you have any views on what triggered the negative moves in the ASX today? Yeah, it was a function, like the Dow was down a little bit overnight, but then we had the GDP figure that came out, which showed that the economy was stronger. Now everyone's thinking, you know, how we were hoping that there would be more, you know, more interest rate, you know, for cuts. You know, maybe that's off the table. That's sort of my reading of it. Marty, did you have a different reading of it? No, it's the same. I guess it was triggered by the bond market sell-off on the back of that GDP print. The bond market sell-off, which has kind of leaked into the equity markets today. Thanks very much. We are just getting to the tail end of our questions. The next one is from James. Does it make sense to you that the 20% PMC buyback is being targeted at a discount to post-tax NTA? The PICs conversion would have effectively delivered pre-tax NTA. Yeah, I mean, it's a bit confusing to me because, like we think of, you know, I think I mentioned earlier that Platinum Capital was trading, I think it's only trading, I think it's trading at a 0.75% discount to after-tax NTA and a 5.2% discount to pre-tax NTA. To me, the difference between the two is whether you can, whether the tax that's paid and the franking that comes from that tax is of any value. I know for our shareholders, about 65% of our shareholders are self-managed super funds. If we're investing on their behalf, then they believe that franking is of value to them. Obviously, to me, there's a lot of arguments about that. A lot of people say you've got to look at after-tax. I believe you should look at pre-tax. Yeah, agreed. Thanks very much, Geoff. Marty, this next question is for you. It's our last one. Future Generation Global has been accumulating Morphic. Could WAR join in to bring about a catalyst? I think the short answer to that one is no. I think Future Generation Global announced a change of substantial yesterday at 19.6% of Morphic. As the question said, you know, it has been accumulating discounts about 13%. They had a holding. I think the board of Morphic 's been pretty clear about the outlook for the company going forward and the ability to, you know, aggressively buy back shares and return capital to shareholders at a point in time. I think, given, you know, Geoff's association with Future Generation and WAR, we'd be considered associates, which means at 19.9%, WAR couldn't then jump on and buy another 19.9%, for example. Unable to buy under the Corps Act. Once you get to 19.9% collectively, you either have to stop buying or make a takeover offer. We're kind of, WAR's blocked out of that one, and FGG's been accumulating that one. Thanks very much, Geoff and Marty. We did just get one final question from Nava. Why are you invested in LSF? Because we bought it as an LIC trading at a discount. Yeah, I mean, we did, when it was trading at a bigger discount, we had a big position in it. It got to a premium NTA, we sold out. It went back to a discount, and we bought back in, similar to Perpetual, you know, the Perpetual LIC, which we did have a big, we nearly had 5% of it at one stage, when it was trading at a bigger discount. It went to NTA, we sold out. It went to a discount again, and we bought back in. Thanks very much, Geoff and Marty. That's all of the questions. Thanks to everybody for sending them in. Very dynamic Q&A session today. Geoff, I'll close, send over to you for closing words. Thank you very much, Olivia. Thanks, Marty. Thank you all shareholders for your interest. If there are any additional questions, please send them in to us. It's better that you understand how we're managing the money on your behalf, and then you can either decide whether you want to stay as a shareholder, or buy more or sell. As we sort of mentioned, once we get equilibrium in terms of the buying and the selling, we're more likely to be trading at NTA, and then to go to a premium to NTA. Again, thank you very much, and looking forward to seeing you soon. Actually, the roadshow, I know there's a regional roadshow coming up. The national roadshows, we've got to wait a little bit longer. Thanks very much for all your support, and good luck investing. Thanks.