WAM Alternative Assets (WMA) Investor Update summary

Portfolio revitalization and asset allocation

• Portfolio diversified across private equity (25%), water rights (15%), infrastructure (14.7%), real estate (8%), agriculture (7%), private debt (4%), and cash, with ongoing adjustments to optimize returns.

• Water rights allocation reduced from 40% in 2020 to 15%, targeting a 10%-15% range for better diversification.

• Real estate and infrastructure allocations are set to grow, while agriculture exposure will be phased out.

• Cash is being actively managed through a new treasury tool with Fortlake, aiming to enhance returns and maintain liquidity.

• Portfolio aims for a long-term return of 10%+ through a balanced mix of income and growth strategies.

Performance and return drivers

• Since October 2020, the portfolio has delivered a 9% annualized return, with performance impacted by initial strong exits and subsequent muted returns during the revitalization phase.

• Water rights and private equity have been key contributors and detractors at different times, with weather and market cycles influencing results.

• The portfolio is now exiting the J-curve phase, with recent exits and improved performance expected.

• Dividend sustainability is strong, with a profit reserve covering three years and a yield close to 8% (including franking credits).

Share register and capital management

• Shareholder base has grown by 40% since the new manager's appointment, with 70% of the register now new investors.

• Efforts to tighten the register and align with long-term investors are ongoing, aiming to close the share price discount to NTA.

• A premium target mechanism is in place, with a potential wind-up vote if the share price does not reach a premium, though current sentiment suggests continuation is likely.

• Buybacks are not favored due to limited effectiveness in the LIC sector; focus remains on communication and demand generation.