Look, good morning everyone, and thank you very much for tuning in to the WAM Alternative Assets Webinar. Myself, Geoff Wilson, we've got Nick Kelly, who is the lead portfolio manager, managing, you know, this pool of capital on behalf of all shareholders. Lara from one of our senior corporate affairs people will be helping with the Q&A. I'll just talk a little bit about, you know, from, I think, the director's perspective, and then we'll pass over to Nick to drill into the portfolio. And then we'll, of course, open up for questions. Look, you all know this is your company. The reason we're here communicating with you is so you can ask us any questions you want. The more shareholders understand about the business and the company, the more likely you are to be medium long-term shareholders. You know, probably, you know, where the share price is now at, it's probably the biggest opportunity of all the WAM LICs to be buying, you know, say a dollar of assets for broadly AUD 0.85. You know, the current NTA is around AUD 1.18, and the share price is around that, you know, AUD 0.99. Now in terms of the result for the last 12 months or the last six months, yeah, a very solid result. I suppose that's. If you think of WAM Alternative Assets, you know, that's what it's, you know, delivered. In terms of performance over the last couple of years, the underlying portfolio, it's probably been a bit lower than we have over the last six months. You know, it's the last six months performance has been better. And we're expecting, you know, over the medium term, you know, for that portfolio to continue to, you know, deliver. And we'd like to get to, you know, sort of that annualized sort of low volatility performance of the underlying assets of around that, you know, 8%-10% per annum. In terms of the, you know, the actual dividend, you would have all seen, you know, the board after, you know, doing, you know, quite a bit of analysis and discussions, you know, with Nick and his team, have, you know, decided to increase the dividend. That was really, yeah, rather than increasing it like by a fraction of a cent, like 0.1, there was quite a bit of debate and the logic was to increase to that, you know, three cents. You'd assume that we'll do, you know, the same or similar for the final. You would have noticed that the franking was reduced, and that's just a function of timing. We were in a position, and it really depends on exits out of the various assets. What we didn't want as a board is to put pressure on the manager and say, "Look, you know, can you have additional exits?" You know, where it might necessarily be the exact opportune time to then pay the tax and get the franking. It was really, you know, the decision was, "Okay, let's, you know. We can fully frank the interim. We're confident about that." We weren't, you know, the final was questionable, and we said, "Look, what are we very comfortable for the next 12 months for the franking to be in terms of the amount of franking we have at this point in time?" And that was, you know, to frank it, but this dividend and the final dividend to 60%. Now, in terms of, you might say, "Well, there's a reasonable profit reserve there," and that's true. Sorry. When you can pay a franked dividend is you have to have paid the tax, or you have to have received, you know, dividends from someone else that's fully franked. You know, we just, you know, some of those gains have been made, but they haven't been realized. There's a bit of a mismatch in terms of timing. That's probably a little bit of an overview of the result, the dividend. In terms of, you know, where we're going, you know, forward, obviously, I mentioned earlier, you know, you've got AUD 1.18 of assets trading around that AUD 0.99 mark, you know, AUD 1 mark. The logic is that the assets should be trading. Well, what is equilibrium? Equilibrium is AUD 1.18. Now, I've got a sizable investment, and I know everyone who's tuned in has got a sizable investment, or has investment in the entity. And we'd all feel a lot happier if the share price was fully reflecting the value of the assets. You know, that's AUD 1.18. You know, that will happen over time. Of the, you know, the Wilson Asset Management LICs, I think there's only a couple of them, you know, all of them, seven odd of them are trading around NTA, if not a premium, and it's, you know, two of them are trading at discounts. And maybe there might be questions about discounts a little later. You know, one of the board's goals is to make sure that the share price fully reflects the NTA, and that's to have WMA trading at that, you know, AUD 1.18. You know, our plan is that in the medium term, that will be achieved, if not traded at premium. Yeah, particularly probably in these more uncertain times, where you know, the volatility of the equity market, you know, a lot of that's removed from, you know, WMA. Why don't I pass over to Nick, who can drill down and, you know, give you a bit of an idea of where we're positioned now and where the portfolio, you know, the outlook. Probably talk a little bit about. I don't know if we wait for questions, but private credit. Yes To start off, WMA has zero exposure. Is that- We have a small exposure to corporate private debt. I can touch on that. Yeah. How much is that? 10% of the portfolio is in private debt. In Australian private debt. We don't have any U.S.- Yes, but there's no. private debt exposure. Yeah, but in terms of private credit. Yeah. There's none. Well, we've got that 10% allocation across two strategies, and we'll talk about that. I know some questions have come through from the shareholders on private credit, and given some of the press we've seen of late related to the U.S. market, we don't have any U.S. private credit exposure. Yeah. Yeah. Yeah. We only have Australian exposure. We'll talk through that exposure. Okay Shortly and why we're comfortable continuing to hold it. Great. Thanks, Geoff, and thanks everyone for dialing in. Just moving to the next slide, which talks to our performance over time. As Geoff alluded to, the last six months' performance has been stronger, which is great, so just under 5% for the six months. You know, since inception, since we took this portfolio on from Blue Sky back in 2020, we've delivered 9%, portfolio performance, which we're really, really proud of, and it's sort of around that 10% number, which is what we're targeting to deliver over the long term, with sort of half the volatility of equities. That said, as you can see, the last three years, and Geoff touched on this, the performance has been a bit weaker, and really there's a couple of reasons for that. Firstly, you know, the portfolio that we inherited, it didn't have what we call vintage diversification. When it was initially IPO'd, the capital was put to work pretty quickly. Then there were no more investments made into private equity and the like. What you need to do with these sorts of programs is continually invest through time so that you get sort of new investments going into the ground, but also exits coming back. You can see the first couple of years' performance was stronger because, you know, we had the usual experience of private equity managers, which is they tend to sell their good performing assets first and then hold on to the things that need a bit more work. We then had to reinvest that cash that we got back from those exits into new investments. Something that we talk about quite a bit is with private equity, we incur J-curve and, you know, the J-curve. Probably the easiest way to think about the J-curve is it's like renovating a house. You buy a home, you then sink cost into the home to improve it, and you only get the benefit at the back end, as you exit that asset. That's where the uplift comes. You can sort of see that with the chart here, that we really are at the bottom of the J-curve, and we're starting to experience the revaluations, particularly on the private equity program, and looking at a few exits coming, which is great. The portfolio's in really good shape, and feels like we're in that sort of harvest period for returns. The other important point here is that the correlation point, 0.01 correlation to listed markets. What does that mean? It means the underlying portfolio doesn't move around with listed markets. We don't own any listed stocks in this portfolio, so while the WMA share price can move around based on sentiment, and it's obviously come off a bit in the past few weeks as equity markets have been hit, we don't, you know, I don't own any underlying stocks, and so the portfolio is pretty well protected and that's its role, right? It's there to provide resilience within a broader investment portfolio for shareholders. For the people that are invested- Mm in the stock market. Yes In theory, depending on what stocks they have. Mm You know, say if they have the index, that is one. Yes effectively. Yes. I like thinking of percentages. Yes. Say 100%. Yeah means you've got 100% exposure. Yeah to the equity market. Yeah. That means the underlying assets of WMA. Mm is 1%. Yeah. In effect, yeah. Yeah. We're moving. Yes, exactly. Yeah. We've got no- Virtually. None. None. No correlation. Correct. Yeah. Yes, exactly right. Okay. That makes sense. We don't own. Yeah Worried if it was 0.9 given we don't own any of these stocks. No. I would have thought. Yes Like to me, if you'd asked me. Mm without that number. Yeah, yeah. I would've thought. Bit higher. Okay, yeah. Yeah, yeah I would've definitely thought higher than that. Yeah. Yeah. Like, in theory, they're assets. Yes. If the market goes up and down. Yes in terms of as a function of the underlying economy. Mm-hmm. Mm-hmm Mm-hmm You'd be plugged into that as well. Yes. Yeah. Yeah. I'd say, you know, if I had to guess, I'd say 40%-50%. Yeah. Yeah. Yeah. It's 1%. Around 0.5. Correct. Okay. Correct. Spot on. If we move forward to slide seven, which shows the current positioning in the portfolio, split by the asset class on the left and on the other side there by the theme. What, you know, what's changed? A few points to highlight. The private equity exposure has increased marginally since the last time we had a webinar. That's really off the back of our commitments that we've made to private equity managers being called, but also some of those revaluations coming through that I talked about. The infrastructure allocation's been pretty steady. The water allocation there at 13.5%, marginally down on where we were previously. We had some legacy water exposure through our agri exposure, so that's come back, but we're really comfortable with where water is in the portfolio at the moment. We think it is really attractive given the drier conditions that we're seeing through the regions where we own water entitlements, and also the government buyback of water entitlements is putting pressure on pricing. The real estate exposure up to 12%, that will continue to head north, closer to 20% over time. We continue to see really attractive opportunities buying high quality real estate from motivated sellers in the Aussie market. What type of real estate? Yeah. Look, sort of, commercial real estate, life science campus we've just bought in North Ryde up the road here. We've got some residual residential stock that some of the large REITs have looked to exit that are sort of non-core to their balance sheet. You know, some of the groups like Dexus, Mirvac, and others have been under pressure to you know, do things to improve their balance sheet, and we're about to pick up some high quality real estate from some of those groups. The private debt exposure, I'll touch on shortly. The agri exposure's come down, and then finally that 9.5% to the treasury pool. That's investment grade credit strategy. We put this in place just on six months ago, and that's done exactly what we want it to do, sort of delivering twice what we would have got out of holding cash. We're able to tap that treasury tool as we need to for the capital commitments that we've got. Just making the portfolio work harder for you as our shareholders. Maybe moving to the next slide, and we can touch on private debt, which is to the right-hand side. As I said, we've got around 10% allocated to private debt in the portfolio, to the two managers you can see there, ICG and Longreach. Both of these groups are really high quality. If we sort of step back and just look at private debt quickly, I know there's some questions around this, so it's important to cover it. You know, why does private credit exist as an asset class? Now, is it private credit or private debt? Uh, would like to- Did you talk about private debt, and then you're talking about? It's the same. One and the same. Exactly. One and the same. Okay. Yep, to distill it. Yes. For everyone, which is nothing to do with private equity. Yes, correct. Different things. Typically, what you will find, especially in the U.S. market. Yeah Private equity firms will go and buy a business. They will buy a business for AUD 100. 60 of that will be their capital, so that's equity. The other 40, they will go to the private debt market and get capital from private debt managers for the AUD 40. Which is called private credit. Exactly. Okay. Exactly. Some of the issues that we're seeing. Yeah, why does it exist? It exists because banks are finding it harder and harder to do what they have traditionally done. I'm sure all of us have walked into a bank before, sort of mortgage on a house or whatever it might be. The bank has a checklist, it's got 20 boxes you need to tick, and if you can't tick them all, for whatever reason, you might be a sole trader, have your own business, you don't have regular income, whatever it might be, they find it difficult to deal with you. Right? Private credit as an asset class has been created to effectively fill the void of the banks. Right? The stuff the banks find hard to do, private credit can do it, and it can do it in a more flexible manner. As an asset class, I think it's here to stay, right? It's not something that's gonna just disappear. It is here to stay. It should be a small allocation in investor portfolios. Some of the issues we've seen in the U.S. market of late has been related to the exposures that these groups, so Blue Owl as an example has been one that's been quoted in the press quite a bit. It must have annoyed a journalist at some point in time, but they along with some others have got quite a bit of exposure to the technology sector. Now, that is quite different to the Australian market, and I think that that's a really important point to make. That in the U.S., about 30%-40% of all private equity transactions are technology-related businesses. That's private equity? Private equity. Yeah Going after those businesses. Yeah. Exactly. They're funding it with private credit. Yeah. Right? Now that 30-40% sort of technology exposure, if you like, in the U.S.- Yeah It's about half that in Australia. We don't have the same size of the technology industry. Or actually even- in the Aussie market. Correct. Yeah. It's a fraction of the U.S. This, the challenges around the winners and losers from AI and all of that, is far more pronounced in the U.S. because of the technology exposure that exists in that market. Now, that's not to say the Australian private credit market will be untouched and will be absolutely fine. Mm. I do think there will be some challenges in the Australian market. The Australian market is quite a different beast because about half of the private credit market in Australia has been backed by real estate. It's real estate. You've sort of got real estate private credit and private credit provided to corporates, to corporate balance sheets. The real estate side I think has got some challenges to come. A lot of the lending that has been provided there I don't think has been awfully disciplined. There's been lending that's been provided to, you know, residential developers and the like. That comes with significant risk. That is equity-like risk. I think the challenge is that people have probably gone into some of these investments thinking they are really safe and secure, but there is a lot of risk attached to these. There's a few key things that we look for, and then part of the reason we've partnered with Longreach and ICG in our portfolio, so they only do corporate lending, not real estate lending, to be clear. There's a few things to watch. Firstly, backing groups who have strong- Yeah, those guys have no exposure. To real estate. to real estate. No, no. Which is sort of. Correct been where a lot of the That's been where some of the challenges, I think. Yeah are gonna appear. Well, we're already seeing some. Some cracks. Yeah. Yeah. If you think about it, one of the key things to look for with these groups, and this is really key to our research process, is strong workout experience, right? It's one thing to go and provide a loan. It's a different thing to work it out when it goes pear-shaped, right? Well, ideally it doesn't go pear shaped. Well, hopefully it doesn't, but things happen, right? Yeah. Yeah. Yeah. Yeah. Yeah. Sometimes people are late. The challenge in private credit is a lot of the people running these businesses are ex-bankers. They're used to providing loans. Yes. They're not used to working them out. Gotcha when someone doesn't pay you back, right? That workout and restructuring expertise is really important, and we've had a pretty sort of benign credit cycle in this country for the last, you know, 30 or 40 years, and there's not that many groups that have that expertise. But groups like ICG and Longreach in our portfolio have that in spades. Longreach as an example, the team is full of, you know, ex-insolvency practitioners, restructuring, workout experience. That's really, really key for us, and they underwrite each loan as if the person's not gonna pay them back, so they can get comfortable on the credit. That's the first thing. The second thing is, when looking at a private credit portfolio, if everything sort of is marked at par and there's nothing that's been revalued down, that's a red flag. Right? If you go and provide 100 loans, there'll be a couple of borrowers there that are late on their interest payments or whatever it might be. Those loans need to be revalued on an ongoing basis. The usual saying, "If it looks too good to be true, it probably is." That's a really important point for us. The third point is the number of loans. In private credit, unlike equity, the best case you can hope for is someone pays you back what you've lent them with some interest along the way. There's no upside like equity investing, right? Having a diverse portfolio of loans, lots of loans, is a good thing, right? Each loan you add to the portfolio improves the overall risk-adjusted outcome. Finally, fees, just demanding transparency from managers in terms of the fees that they earn, including origination fees, which is a point of contention in the industry, ensuring that managers are being transparent on that. I know we've spent a lot of time on it. Mm-hmm I know there was quite a few questions from shareholders. I'm sure we'll have additional questions, yeah. We'll have more, so please, yeah, please do ask. In terms of the exposure you have to private credit. Yeah. in the portfolio. Yeah, just those two groups there. Yeah Just under 10%. Yeah. Very comfortable with those portfolios. in terms of if you change your mind. Mm At any point in time, what's the flexibility with those? They are more liquid than private equity, so it is easier. Yeah To get out of them. Typically the way it works is you sort of can sort of redeem out of the fund, or they can place a portion of the loans into a separate vehicle, and as those loans are repaid, we get paid back. But typically, you know, these loans have anywhere between sort of 18 months, two years, out to a four- or five-year term, but so it tends to be shorter than, say, private equity. Yeah where we're sort of locked in for 10 years or thereabouts. Got it. Yeah. Probably the only other thing to highlight with this slide is, there's no new names on this slide from our last webinar, but the point to raise is on the private equity side, pretty much everyone is back out raising capital in private equity. We're just working through a bit of a sweep of the market at the moment and committing to a number of these new strategies. We can't commit to all of them, and so we need to be really selective about backing best-in-class groups who we think are gonna deliver the best risk-adjusted returns for you, our shareholders, and so we're working through that at the moment. But they all are back out in the market raising capital, which is a good sign that we've got, you know, the private equity market is healthy. We've started to see increasing transaction activity, so activity in 2025 in terms of deal activity in private equity was twice that of 2024, which is a good sign. Seeing these groups both buy businesses, but starting to sell businesses as well. What about 2026? What's happening then? What are we seeing? Continued exits. I mean, just in the AFR this week, there's a group in the market that sold two businesses. We're starting to see a more meeting of the minds in terms of, you know, getting deals done. Yeah which I think was a bit of the challenge before, that the group trying to sell wanted a number. Yeah The group wanting to buy was down here, and you couldn't get to that price point. We're starting to see a sort of greater desire of these groups to get deals done. You would have thought the shakeout, you know, in the equity market because of the war. Yes, yes. In theory, that'll, you know, people will find it harder to raise equity. Yes. Well. So- Yes and no. I mean, these, it's an interesting dynamic in the private equity market. Oh, sorry, listed equity. Listed equity, yes. Yeah, yeah. In private equity. Yeah These groups, there are a small number of high quality private equity groups in the Australian market. Yeah They don't have a lot of trouble raising capital. Yeah. The benefit of their capital base is it's a good capital. The good thing is, yeah, so then they'll be raising capital in a time Yes, correct, to go out and buy stuff. where expectations are more realistic. Yes, correct. Exactly Because of the volatility is higher. Correct. Yeah. everyone, you know, the uncertainty level's high. Yep. Yeah, exactly. Yeah. We've seen some of these groups as well buy, you know, public to private. I think we're gonna see more. Yeah of that, buying publicly listed businesses. Yeah taking them private to drive more efficiencies as well. In theory, they're called vintages, aren't they? Yes. In the private equity. Correct, yes. So 2026- The 2026 vintage. assuming, depending on. Yeah, the 2026 vintage- Mm Could end up being a great vintage. Could be. 'Cause in theory you want to be buying. When everything- When everyone else is selling. Everyone else is alive. That's right, That's right, exactly. Yeah. Correct. Correct. Spot on. You get it. Yes You make the best return. Correct. Okay. Then you've got to be thoughtful about the next vintage. Spot on. Moving through to the next slide, we just wanted to highlight quickly a couple of the businesses that we own within the portfolio and sort of bring it to life. Slater and Gordon, the business, I'm sure most of you would be aware of. So we own this business through our investment partner, Allegro. They bought the business. It was a publicly listed business, mostly controlled by hedge funds back in 2023 that had gone through a lot of challenges. The team at Allegro, in our opinion- Hedge funds in the end. Hedge funds in the end. Not initially, yeah. Initially retail investors. That's right, initially it was everyone. everyone. Correct. When it went to sort of AUD 9 or Correct, and then right down to nothing. The Allegro guys- Yeah are a specialist in turnarounds, right? They like buying these sorts of businesses where there is a lot of work to do. Everyone else is running away from them. Mm. They sort of run towards it. They've got a really strong pool of operating partners they draw on to put into the business, and so they've improved that business significantly, both in terms of revenue and margins and getting cash back more quickly, which was a real challenge in the business historically. That's already been valued at 2x what they bought it for, and it's heading towards more like a 4x-5x multiple on exit. That'll be a great story for Allegro and just- Off the top of your head, do you remember what price? What they paid initially? They paid? I know. It was bugger all. Yeah. I think cents per share. No, anyway. I can't remember. It'd be a few cents. Yeah. Like, to me, in theory. few cents, maybe. Yeah. Yeah, it was nothing. Yes. In a relative sense. Yes. In terms of the value of the business. Correct. Well, the market at some point in time put on the business. Correct. Yeah. Yes, a fraction of that. Yeah. They've obviously put a fair bit of cost in, you know, building into the business. Of course, of course. Ensuring that all the senior partners have got some equity in the business as well. Yeah. That business is ticking along and doing really well. The second one, Healthcare Australia, not many people probably know this business. It is actually a huge business. This business employs 15,000 people in Australia. Mm It is the largest outsourced provider of healthcare professionals and aged care professionals in the market. They're an outsourced staff provider. It's ticking along really well. This is owned by Crescent Capital Partners, one of our investment partners in Fund Seven, and a continuation vehicle that we've got. That business is ticking along. They've won some significant contracts with the government, and there's a couple more tenders they're going after with the government that would near about double their revenue. This is a big business. This business generates a better part of sort of over AUD 500 million in revenue, so it's a big business providing a real you know essential need to communities. We really like this sort of business. It's pretty defensive, and it plays to that theme around the aging demographic, which we like as well. Like those two. Mm in terms of the whole portfolio. What would they make up? Yeah. Yeah. Around, HCA would be a bit bigger because we've got exposure in two places. Yeah It'd be about 3%. Yeah. 3%. Okay, very defensive. The other one about 2. Correct. Yeah. Correct. With that, I know we've got some questions coming in, so I'm just gonna hand back to Lara, who's gonna run through the Q&A process with everyone on the call. Thanks, Nick, and thank you to everyone who sent through webinar questions. Before we dive into those questions, in April, we will commence shareholder presentations and we'll be visiting seven cities across Australia. You can register using the QR code shown on the screen. Now, our first question comes from Brett: "Why have previous efforts to reduce the NTA discount not been successful, and what is the plan now to achieve a reduced NTA discount or even a premium? That's a good question to start. Let's take a step back. In terms of, I mentioned a little bit earlier. I mean, what is equilibrium? Like in terms of, you know, first year economics, you know, they show you the chart for equilibrium, and it's where supply and demand meet. Now, where should equilibrium be for a listed investment company? In theory, equilibrium should be at NTA because that's the value of the assets. Now, when we took over WMA, which was when- 2020. Yeah. October 2020. What's that? Five and a half years. Just under six years ago. I think, you know, the discount was in the 30s%. I think it was mid-30s%. Yeah, it was in there somewhere. Yep. Obviously, you know, it's gone from mid-30s to, say, 15% discount where we are. How do you achieve an equilibrium, which I say at the moment, say, is AUD 1.18? It's when all the people that are invested in the company understand what the company is doing and are happy with what the company is doing in terms of performance, and so therefore they're not sellers. You actually don't need to get too many buyers for then to trade at NTA. What you tend to find is when you're at a big discount, like, you get people that specifically just buy the discounts. So some people have that strategy. You know, they'll have bought the 30% discounts. They'll sell it when it's a 20% discount. What you don't know, you know, we know how many shareholders that are in WMA, we just don't know how many are medium long-term shareholders and how many shareholders, you know, for various reasons. You know, it might be they actually need the money, you know, because they're buying a house or some other reason, that we just don't know how much supply is still there. So eventually the supply-demand equation, you know, we'll get to equilibrium. Unfortunately, we just don't know exactly when. Actually, I don't know. Do you know? I know Marty gave us those stats of how much of the portfolio had turned over. The register. Yeah, the register. The shareholder register. Yeah, yeah. Yeah. So- I'm sorry, yeah, the shares. Yeah, I think sort of. What was it? It was a big figure. It was a big figure. It surprised me. About 70% of shareholders are new to the register. Since we've been S ince we took it over in 2020. Yeah. About 45% today of the register for WMA own at least two WAM products. Yeah. It has changed a lot. Yeah, it's changed. It's taken some time for that to come through. Yeah. That's obviously going from the big discount to where we are. Yes at the moment. Yep. In terms of it getting to NTA, it's really, you know, you don't know exactly when it is because you don't know when that supply reduction, you know, reduces. I suppose if you look back, the LIC that took us the longest time to get to a premium, WMA is nearly in that category. Mm. Mm-hmm Because it took us seven years with WAM Research to get it to trade at NTA. Probably three or four years ago. What you're doing is you're communicating with shareholders, you're making sure they understand fully, you know, the business, understand fully what they've invested in, and understand sort of the, you know, what we're trying to achieve and the outlook and therefore they're comfortable with that. Like if any shareholders aren't comfortable with that, to me, you're better off selling now because then we get to NTA a lot quicker. With WAM Research, it took us seven years for it to get to NTA. Then because everyone, you know, that was a shareholder was very happy with what they had, then there was no supply. What was it? Probably three or four years ago, at one stage, WAM Research was trading at a 58% premium to NTA. Now, that, the 58% premium to NTA is ridiculous as, like, a 15, you know, percent discount to NTA. Yeah, so to me it's... Unfortunately, if we knew exactly, you know, that overlap, you know, then we'd probably all be front running you know, we'd all be buying it beforehand. All I know is I'm incredibly confident that we will get to NTA. You know, we have, in terms of in corporate affairs, marketing, and, you know, and communication, we, you know, we've got a big team, say, you know, 14 or 15 in that space. Our goal is to, you know, communicate with all our shareholders so they understand what they've invested in, and they're happy with what they've invested in, you know, the underlying managers perform for them over time. Thanks. Thanks, Geoff. Nick, do any of the investments have a particular exposure to the diesel price or availability? That's from Richard. Yeah, it's good. It's a really good question, Richard. No is the short answer. We were having discussions yesterday with our agriculture investment partner and what sort of exposure they've got to diesel through the farming operation. We've got a large agricultural asset that's a legacy asset, Nericon Citrus, out in Griffith. Unlike sort of annual crop producers, being a permanent crop in citrus, there is less use of fertilizers and less use of diesel on the property. They're pretty comfortable. They've got a sort of stockpile there, so they're sort of comfortable with where they're at. What's that as a percentage of the portfolio there, Nick? Of the portfolio, that asset is just on 6%. Gotcha. It's small. Obviously, depending on how long things, you know, progress on and the challenges we face, clearly, you know, transporting fruit from, you know, the farms to the pack house, the pack house to the shelves where we all buy it. Mm. You know, that's gonna cause price increases. Unfortunately, for all of us as consumers, it'll get passed on to consumers, right? Yeah. We will bear the brunt of it over time. In terms of the impact from a WMA perspective as a shareholder, it's negligible. The fertilizer, because isn't it something like 31% of the fertilizer comes from- Yes, urea. The fertilizer use on this property for this citrus. Yes is pretty minimal. Gotcha. It's a bigger issue with some of your annual cropping. Oh, okay. Like cotton. Yeah. Gotcha. Yeah. Gotcha. Yeah. Okay. Trent has raised the point that before the vote, you were saying that you felt advisors were holding off on recommending WMA in their alts envelope. Now that we're post-vote, are you seeing any changes to the shareholder mix? What has the advisors' feedback been? Yes, we have got a couple more advisors onto the register. These groups they do take some time. It does take time to sort of educate them on what we hold and sort of getting through the vote, and that's now continued. We did a sort of email out campaign to a number of the advisors last week, and we've got six or seven meetings lined up for the next couple of weeks to go and engage with those groups on WMA, and many of those are groups we'd spoken to before. We're starting to see it come through. It does take time, to Geoff's point. We are starting to see more engagement from some of those groups. Obviously, some of those are, you know, some of these groups can be quite sizable. Once we get a bit of flow from some of them and sort of they, you know, perhaps put WMA in their model portfolios, then we can start to see that come through. That can have a real impact on narrowing the discount over time. Lots of work with that advisor community to get them to understand WMA and importantly the role that WMA plays in their portfolio. The short answer is, yeah, we've seen some of them come on, and we're engaging with more to bring them on soon. Eddie has asked about the food scarcity- Mm -point on the investment graph, the theme graph. Yeah. The food scarcity theme, we play that through two primary parts of the portfolio, Eddie. Firstly, the water entitlements that we use. Obviously, water is a, you know, its primary use is in for agricultural commodities, so the food scarcity theme gets played through our water entitlements that we own and also the agri exposure. I just referenced the citrus farm that we own. That they're the primary parts of the portfolio that are exposed to the food scarcity theme. We have a question from Dania. She says: "The profit reserve currently covers 2.4 years of dividends, which is very reassuring. Can you walk us through how a pickup in exits, given WMA's track record of exiting at a 33.6 weighted average premium to NTA, would flow through to the franking account and the dividend trajectory over the next 18 months? What comfort can you give shareholders around current NTA? Yeah. Thank you, Dania. In terms of the exits and sort of dividends and franking from here, we've had 15 exits on the portfolio since we took it over just over five years ago, and they have averaged out at a 33% premium to NTA. Clearly those pops that we get on exit improve the you know the profit reserve, but importantly the franking, right? As Geoff said, we need the exits for franking. We do have though for parts of the portfolio like infrastructure and private debt income, and that helps with the franking as well, okay? For franking, we do need the exits. We can see that we've got sort of three exits in our pipeline sort of over the next six months. Just on the franking point, Geoff sort of talked about, you know, bringing the franking back to 60%. You know, in the discussions with the board, that was important because we didn't wanna have a situation where we paid a fully franked interim dividend and then got to the final dividend and had it sort of fall off a cliff. Because the exits hadn't occurred. Because the exits hadn't occurred, exactly. Yeah. We, you know, some of this we can control, some of it we can't. It's up to the market. We are confident that they are there and they are coming, given where we're holding these assets. What we said is sort of 60% franked for this dividend, at least 60% franked for the final, and then from there on, we're really confident that both the profit reserve, which is unrealized and realized gains, will grow as the portfolio delivers. Then we'll have more recurring exits, okay? That's been. I mentioned this sort of vintage diversification challenge that we had with the legacy portfolio where we didn't have enough of it. Hence the issue at the moment where we've not had enough exits because we've had to get reset in the portfolio. That's now starting to come through, and so I don't expect that's gonna be an issue long term. Ideally, we'd love to get to a situation where, you know, the profit reserve keeps building, we're able to, you know, slightly increase the ongoing dividend yields, and then, hopefully pay special dividends potentially along the way where we get those pops on those exits, and so linking special dividends to, particular, you know, outperformance on some of the private equity, underlying businesses we own. We wanna be able to do that longer term, and I think that will be important, you know, from a narrative perspective as well in closing the discount to NTA. I see the ICG share price is down 30% over the last six months. Are you comfortable that the market is not reflecting the value of its portfolio? Yeah. ICG is a global listed asset manager listed in on London Stock Exchange. It is a huge asset management business with over sort of 70 billion in assets. The portfolio we're in is the Aussie Loans Fund. A lot of these businesses, being listed businesses, are obviously been you know down in over the recent period. We're not concerned that the portfolio we own is obviously a is an unlisted fund, so is not that, the ICG, the listed business to be clear. That is a listed global asset manager that has lots of unlisted funds, so it's not representative of the underlying portfolio that we own. Got another one. It's sort of like in an Australian context. Mm. I suppose Magellan is not a great example, but it's like Magellan being the fund manager. Yep the underlying funds. Correct. which is totally separate. Some of the global ones like, you know, a KKR or something like that. Yeah. You know, stock price might be down, but you're invested over here. Yes, different fund. In a very different fund. Correct. Yeah. Correct. Well, I suppose, like in terms of Blue Sky. Yes. Yep. Correct. You know, Blue Sky, the fund manager actually. Was a listed business and then this was listed, yes. which ended up becoming insolvent. Yes. Anyone who invested in the actual fund manager- Mm-hmm. Mm-hmm. In terms of the assets, the actual fund- Exactly. Different. Correct. Different. Correct. Different. Correct. This is now one of the funds. Correct. Yep. Continues on. Yes. Correct. Got another question from Dania: "For a new investor watching today who holds a typical mix of Australian equities and cash, can you quantify what adding WMA has historically done to portfolio volatility and return outcomes, and why now buying at a 20% discount makes it more compelling than at any point since WAM took over? Yeah. In terms of if, you know, an investor holding equities and cash adding WMA to their portfolio, the most impact it will have is reducing risk, right? It's effectively a smoother profile to achieve the return stream you're looking at as opposed to experiencing volatility, which happens, as we've seen over the last few weeks with equities. Okay? That's its primary driver, is being able to deliver similar sort of returns as holding equities and cash, but removing or reducing, I should say, the volatility of those return streams over time, so reducing risk. It would, in effect, depending on the allocation that was made, probably halve the volatility that an investor would face. Often reference, you know, sleeping easier at night when you hold something like this because it doesn't. We don't have listed stocks in the portfolio. They don't move around like the equity markets do, and so adding it to a portfolio creates a better risk-adjusted return for investors. As we've said, it is trading at a big discount and so, you know, it is really attractive entry point, especially as we are coming out of the, you know, we talked about the J-curve. We are coming out of that at the moment. We're starting to see realizations in the portfolio. The portfolio's in great shape. Geoff talked, we talked about this next vintage of private equity that we're investing in now is a pretty attractive point in the cycle. We do think it's sort of the existing portfolio's primed, but also the new commitments we're making look really attractive in the context of the markets today. It is, it's good buying. We've got a question from Brendan. We're gonna give general advice. Sorry. We talked about that at the. Yes, it's covered in the disclaimer. Perfect. We've got Brendan asks, "Given the widespread AI disruption currently unsettling markets, are there any potential implications to the underlying portfolio companies?" He asks particularly within private equity. Within private equity. Yeah. Look, it's a really good question, Brendan. We've just done a bit of a take on the private equity portfolio that we've got to understand where that sits. There's about 6 businesses we own that are sort of tech exposed, if you like, out of the 40 odd in our private equity portfolio. It's a small portion. That's 6 out of 40. Within the private equity bucket. How much is private equity? 40% of the portfolio. Okay, that's. Around a 34%. Yeah. Okay. Yeah. Oh, 30. Okay. Yeah. It's about 5%- Yeah, correct. has AI. Correct. Yeah. Has AI. Now, clearly there's some other business where they're implementing AI, but. Yeah Sort of AI exposed. Yes, yes. Now one of those businesses is actually for sale at the moment, so we're sort of interested to see how that unfolds. Talking to the manager we caught up with on Wednesday this week. Do we let them know? the process. No, we can't say that is. Okay. No, no, that's. Okay. No, no, that's. Okay. No, no, that's. Okay. They are working through the process. They haven't. I thought they might actually pull the pin and push it out a bit. Yes Given some of this. They're pushing ahead. They've got interest from trade buyers out of Asia, Japan in particular. Okay that are looking at the asset. They think it's an AI winner. Okay. I think this is the challenge, right? Yeah. The sell-off we've seen has been indiscriminate, right? Everything's been sort of hammered. You know, no one's got a crystal ball. We don't know which of these businesses will be winners and losers. Clearly the early adopters, and depending on their role within the technology stack for a corporate, you know, those that are early adopters will hopefully be winners. This, talking to this group the other day that's selling this business are very confident they are a net winner, and they're pushing ahead with this sales process. You know, time will tell. Talking to all these groups, AI is clearly a focus, early adoption's important, understanding the role of the business in the sort of ecosystem of technology within these businesses, and ensuring you've got sort of sticky customer retention, you're more embedded. We've got a couple of businesses, for example, that help other businesses implement SAP, as an example, an enterprise resource planning system that is awfully embedded and hard to displace. Right, so those sorts of exposures I think will be okay. But we're watching carefully, we're keeping tabs on things to understand any new exposures. You know, treading carefully and ensuring that we're understanding the, you know, the risks associated with this part of the market, but it is only a small exposure within the portfolio. Dave asks, "Did Nick or Geoff buy the dip on Tuesday? Did you buy? I bought last week. Oh, before the dip? Oh, it was dipping then too. I've been holding off. I was gonna buy some, but then I thought, "Oh, the webinar's coming up. Did you buy before the webinar? No, no, I thought I'd wait for the webinar, then I'll buy some. Well, because then, like, in theory, if we're talking about, you know, things, aren't we better off? Yes talking about it then? Yeah, true. True, yeah. True, yeah. Yeah, but hey, to me, yeah, it's trigger. Yeah, I mean, buying the dips, we all learn that over time. Mm That's when you wanna buy. Yes, exactly. like, when people are selling. Yeah. The, yeah, the, uh- It has got cheap, right? Like, we were sort of holding steady there at sort of AUD 1.03, AUD 1.04, and then we're down to, I think, a low point last couple of weeks, probably AUD 0.96, AUD 0.97, so with the sell-off in the market. You know, it's been obviously. If I buy any, you'll know because. Yes I've got to lodge a director's note. Yeah. I've got five days to lodge. Yes. So... Ian asks, "Can we have more regular NTA updates, at least pre-tax NTA on a weekly basis? Well, you can have them, it's pretty much the same. Yeah. You know, like. With this portfolio, yeah. As it was, because yeah, it's you look at the movement in the NTA. There isn't a great deal of movement. Mm-hmm in the NTA. Yep, correct. The volatility is very low. No, it's very correct. There'd be virtually no point for this portfolio. Yeah. Yeah. Yeah. one of the reasons, and we've been asked that about with our other- Mm -l isted Investment Companies. Like some people do daily, you know, NTAs. But we've always found that the shareholder you want is someone that's taking a medium long-term view. If you want the shareholder that's gonna trade for a cent or so, then you're better off not having those shareholders. I think, you know, the sort of daily NTA sort of ends up encouraging you or potentially getting you to make wrong decisions. In terms of for the equity exposed LICs, you know, whatever the index that they're matched against, if you just adjust their NTA for that- Mm-hmm They've either outperformed or. Yep or haven't. Yeah. So... That ties quite nicely into the next one, from Karen: "How are assets valued on a monthly basis? Yeah, sure. Each of the underlying asset classes has a different sort of cadence for valuation. Water is the most frequently valued, so it's valued independently on a monthly basis. Then you sort of move into real estate and infrastructure. Those assets are typically valued on a quarterly basis. But to be clear, it's not sort of March, June, September, December. The underlying assets will be, each individual asset will be valued on a different time basis. Okay. We get confirmation on the unit prices from our underlying managers on a monthly basis, so they could move in any given month depending on when those valuations occur. Then you move to private equity, where we tend to find sort of annual independent valuations at least annually. Once again, it's not always 30 June or 31 December. It could be, you know, it's typically 12 months from the time when they've bought the business. The first 12 months in private equity, the managers almost certainly hold the business at cost at what they've bought it, and then after that, they'll revalue those assets. If you wanted a given percentages. Mm Water is Sort of monthly. What percentage of the portfolio is it? Uh, 13.5%. Yep. That's monthly? Yep. The private debt portion, effectively monthly. Yeah The income is amortized, that's 10% of the portfolio. Yep. There's 25 that's monthly. Yep. You've got probably, you know, 40% of the Yeah 40%-50% would be sort of on a quarterly basis. Okay. The rest is sort of annual. Yeah. Just on the, you know, we do get this question often around, you know, private equity and valuations and things and, you know, is the NTA the value? Mm You know, we talked about before the 15 exits that we have experienced in this portfolio being at an average of a you know 33% premium to NTA. I mean, that's probably the best evidence we've got that the NTA reflects the NTA. If anything, you know, we've been conservative historically. The other point to note is, with the private equity investments we have is, we're investing with these managers. They don't actually earn a performance fee until they exit these businesses and realize them. They don't earn performance fees on unrealized gains. They only earn those fees when they sell the businesses. They work in vintages, as we talked about before. If they have a business marked at, you know, 100, let's say, and go and sell it for 81, they don't earn any performance fee. They only earn any performance fee on the 80, and they'll find it awfully difficult to raise their next fund, the next vintage, if they're going through this process of marking assets down at the end of the life. There's no incentive for these groups to mark assets up along the way, and I think that's an important point to highlight. In open-ended funds, it's very different, but in closed-end funds like private equity in our portfolio, which is about 35% of the portfolio, there's absolutely no incentive for our underlying managers to mark up assets along the way. I have a question from Gladys about Wentworth Capital. What are the borrowings on its private equity real estate strategy, and how well is it covered? Yeah. Interest coverage is very strong. There's three of the nine assets they own they've got debt on, so the other 6 are all equity. Can you give us what percentage of portfolio- Typically, when they buy an asset, depends on the No, no. Wentworth is call it 6-7% of the portfolio. It will grow over time. They've bought 8, just settling their ninth acquisition at the moment. Three of those assets they've bought, they've put debt into the business. Debt's typically around 40% of the capital stack. What assets have they bought? What type? 100 Harris Street, as an example, creative office building. Yeah. They bought that for AUD 230 million off Dexus' balance sheet. Dexus had it valued at AUD 350 million 18 months ago. It's fully tenanted. You know, the Pyrmont Metro is gonna open out the front, and that they're fixing up a few other things in the building, but it's a cracking asset that they've bought cheaply. They've put sort of 40% debt into that, as part of the acquisition, which is effectively funded from the leases, the income that they're getting from tenants at least 2 times covered. There's sort of double the coverage, which is a really important point. Importantly, if there's risk in any of these buildings they're buying, so there's no. They've bought an asset recently that doesn't have tenants, they've bought it really cheap in North Sydney. As they'll bring tenants in, they might look to add debt in time, but currently it's been all equity funded because otherwise you're just taking too much risk. Very conservative approach to using leverage when buying these sorts of assets. Final question from James. Which macro themes, including reshoring, inflation or even AI adoption, do you think will create the best opportunities for alternative assets over the next couple of years? I mean, inflation's an important one. Infrastructure we haven't spent much time talking about today, it's 15% of our portfolio. Infrastructure is probably, you know, it is a standout asset class that performs well during heightened inflationary periods because you can pass on inflation to the end consumer. Think about toll roads, airports, and the like. Infrastructure tends to perform exceptionally well during high inflationary periods, and that's what we really like about it and its role in this portfolio in terms of its resilient cash flows that it provides us. The AI adoption piece is important. We've talked about the private equity portfolio we've got and why we think some of those businesses will be winners as well. On the inflation point, I should say as well, the real estate portfolio, we have a lot of the leases, especially post-COVID, have been renegotiated to be inflation linked. About 90% of our leases that underlie these properties are inflation linked leases. Clearly any sort of, you know, persistent rises in inflation over time, that can be passed through to the tenant and improve the overall income generation of the property. The inflation protection, I guess, that you get through this portfolio is really, really important. Thanks, Nick. That's all we have time for today. To stay informed with our latest investment insights, join our community of over 100,000 subscribers. You can also follow us on LinkedIn, Twitter and Facebook, or visit our website for more. A recording of this call will be made available on our website shortly, and I'll pass over to you, Geoff, for some closing remarks. Thanks, Lara. Look, thanks, and I saw there was a question at one stage that was up there, about that all our Listed Investment Companies, except this, are in equities. Mm-hmm. Now this is illiquid assets. Does that impact the ability for it to trade at a premium or a discount? To me, with low volatility in the assets, I would have thought. It should be easier. Yeah. It should be easier in a relative sense. Mm. Let's look at a bit of a history. This is a diversified- Yeah - portfolio. You know, I suppose when it was listed with Blue Sky, for a long period of time, it did trade at a premium. I think initially when they floated it, they only raised, or they raised AUD 67 million. How they'd grown the assets over time was through additional capital raisings. Well, they tended to do them, you know, when the share price was trading at a premium. I'm very confident that we, you know, that an entity like this does deserve to trade at a premium to NTA. And you... I mean, there was a question earlier on about, you know, once the vote was over then, you know, then one of the things that were holding people back. Mm Particularly, you know, the financial planners, you know, the big players, the ones that, you know, will decide, as you said, to put it into their, you know, portfolios, they don't, you just don't. It's just not like turning on a switch. Yes. Correct. Yeah. It's not like the day the vote happens, then they buy the next day. Yeah. Unless they were 100% on the journey. What I know the feedback beforehand was, "Oh, look, it's just another excuse not to look at it. Yes. Effectively. That's right. Come and see me when the vote's done. Yeah. Correct. The vote's done. "Oh, come and see me." "Oh, I'm busy." You know. Equity markets are down. Yeah, yeah. Well, that's right. I'm worried about that. Yes. Correct. You know. To me, it's part of the journey. Yeah. Hey, if you're a shareholder and you want to sell and it's trading at a discount, you don't feel good. If you're a shareholder and have faith, you know, that it will get to NTA at some point in time, which it will, I'm sure, you know, then you're, you know, you're on the journey. I think that's important to point that out. Also with the financial planners, et cetera, you know, when they decide to put it into the portfolio as, you know, you know, to give the exposure they want- Mm You know, like, well, it's impossible to get this exposure- Correct - anywhere. What you do is you're getting it on a, you know, buying one share. Yes. Correct. That sort of comes and that's why, you know, back when it was Blue Sky, before Blue Sky, obviously management had their problems. That's why it was trading at a premium, because people wanted exposure. It's just been a big journey for us to, you know, what I call it tightening up the share register. Yeah. Getting, you know, into equilibrium. Look, just to cover off and to conclude, thank you very much everyone who's dialed in, and I know we've had a really good number dialing in. Any thoughts or suggestions you've got, please feed them through. If we've missed any of your questions, you know, please again, you know, just email back. You know, it is your company. You know, we're only here because you allow us to be here. You know, so please, you know, keep in contact. Thank you very much.