WAM Capital Limited (WAM) Earnings Call Transcript & Summary

Good morning, and welcome to the 26th WAM Capital Annual General Meeting. This is a hybrid meeting, held both online and in person here at the Museum of Sydney. I'd like to acknowledge the Gadigal people of the Eora Nation and pay my respects to Elders past and present. Thank you everyone here for joining us in person and for your continued support of WAM Capital, and thank you everyone who's online. Before we begin, I'd like to display a disclaimer on the screen, so please get your reading glasses out. And that's -- that broadly says that we will only be providing general advice. I'm Geoff Wilson, Chairman of the Board of Directors, and joining me here today are my fellow directors, Kate Thorley, Dr Philippa Ryan, Angus Barker, and online we have James Chirnside, and Matt Pancino. Also, here with us today for the last time is fellow Director, Lindsay Mann, who has been with us for 12 years, who joined when we merged with another listed investment company, and has really been an outstanding member of the Board. And it's with great sadness that I think everyone on the Board and shareholders say goodbye to Lindsay. He's an -- he's a shareholder. He'll stay as a shareholder, but say goodbye to Lindsay as a Director. So, I probably shouldn't be doing it now, but on behalf of all shareholders, I'd like to thank you, Lindsay, for those hours and hours and hours of reading through every document in micro detail and always finding significant things that we need to adjust. Yes. We will all greatly miss you. Acting in the capacity is moderator, is Ophelia Lam, who is Wilson Asset Management's Head of Finance, and she'll be assist in addressing any questions either in the meeting or that are asked online. We have Richard King, who is down in the front here, representative from our auditor, Pitcher Partners, and so, if there's any particular questions that you'd like to refer to him on the financial statement, he is here. It's just after 10:00 a.m. and a quorum is present. And so, I declare the meeting open. The Notice of meeting has been circulated to all shareholders, and in the absence of any objections, I'd like to proceed on the basis that notice has been taken as read. I encourage you to read the Chairman's address, which has been announced to the ASX earlier, and also, we've e-mailed it to all shareholders. If anyone, -- if you didn't receive the e-mail, then please go on the Wilson Asset Management website and sign up for e-mails, and then we can keep you fully informed. Shareholders who have logged into the webcast with your user name and password will have the opportunity to submit questions online and/or ask audio questions as well as voting on all resolutions. If you are joining us online, questions can be submitted at any time. For those shareholders that are online who wish to ask a verbal question, an audio question facility is available during the meeting. Obviously, for those shareholders who are here in person, if you could raise your hand, then the microphone can be brought to you. Voting today will be conducted by way of a poll on all items of business. I'll be opening the poll in a minute, and I'll be -- when I do open the poll, a voting icon will appear on the navigation bar. Simply select one of the options to cast your vote. If you change your mind, you can change your vote -- You can change the option at any time until I close the poll. And I'll be closing the poll just before the closure of the meeting. I now declare voting open on all items of business. So you can cast your vote at any time. In the room you can cast your vote at any time or online you can also. In terms of the Chairman's address, which I mentioned that we sent the full detailed Chairman's address to the ASX and also e-mailed it to shareholders, I'll just give you a little bit of a summary. First of all, probably looking at -- in terms of going back and looking at the year we had, let's look at the -- how we've started 2025. I'm pleased to say that the WAM Capital investment portfolio, and this is I've got to take my hat off to Oscar Oberg and his team, it's increased 8.9% in the 4 months to the end of October, and that's outperforming the All Ords by 2.5% over that period. That performance has allowed the company to add to its profit reserve, and the profit reserve at the end of October stood at $0.157 a share. The directors expect for this current year that the dividend, assuming it's maintained at the $0.155, will be partially franked to 60%. In order to sustain a dividend of $0.155, the investment portfolio would need to increase approximately 16% per annum. And there can be no certainty that these returns can be maintained year in, year out. And just to give you a bit of perspective, if you cast your mind back 1 year or so, we were sitting on -- and I think in the more detailed Chairman's address, we were sitting 1 and a bit cents a share in profit reserve after the payment of the final dividend 1 year ago. When we're coming into December, as a Board, we were -- with only a profit reserve to pay effectively half the annual dividend, we were seriously thinking about -- it looked like we're in a position where we're going to have to cut the dividend in half. Because of the incredible performance, the strong performance in terms of the outperformance that Oscar and his team delivered, we're able to maintain the dividend because of the performance, particularly over the December, January and February period. The -- In terms of the dividend we're paying, you'd be aware, when COVID struck, a lot of companies reduced their dividends, we maintained it. Now our assets fell by about 20%, and we're paying out a little under 10% of the assets via a dividend. At this point in time, we've continued to pay the dividend when the profit reserve is there. I think you just got to be aware, and as I've tried -- we've tried to articulate in the Chairman's address that we are paying -- we're really paying you a super return which is made up of the capital that we've made in terms of -- with fully franked dividends. So please be aware of the profit reserves. And our ability to keep paying dividends at that rate really depends on the performance of the portfolio. And some people do get caught up with the performance of the share price, which has traded at quite high premiums and that now is trading around NTA and the underlying portfolio. So that's pretty much the sort of -- just a few of the bits I wanted to highlight from the Chairman's address. Now I'd like to move to the formal part of the meeting, and there's 4 items of business as set out in the Notice of Meetings, 3 items to -- are to be voted on. The Notice of Meeting and explanatory memorandum was circulated to shareholders. In the absence of any objections, I'll proceed on the basis that these items are taken as read. I note the Boardroom are the returning officer for today's meeting, and they'll be conducting our poll. I further note that Resolution 1 is subject to voting exclusions as outlined in the Notice of Meeting. The Board recommends approval of each resolutions. And as Chair, I'll be voting the open votes provided to me for each resolution. We'll advise the ASX as soon as the results are determined, and that will be a little later today. You submit -- you may submit any questions or comments you have to the financial report. Now, the first item of business is to receive and consider the financial statement, the Directors' Report and the Auditor's Report for the company for the year-ended 30th of June, 2024. I mentioned earlier, I introduced Richard King to you. So if there's any specific questions for Richard, our auditor, please direct them by me to him. And as I mentioned, there's no resolution on this matter. Do we have any questions online for the Directors' Report and Auditor's Report of the company for the year-ended 30th of June 2024, Ophelia?

Nothing for this one, Geoff.

Do we have any questions in the room? No. Now we come to the items of business that require a vote. Resolution 1 relates to the adoption of the Remuneration Report. You submit online, please submit any questions you have now. The proxies received are on the screen. For the open proxies, I mentioned earlier that the ones granted to me as Chair, I'll be voting in favor. Do we have any questions online for the Rem Report?

Nothing online.

Do you have any questions in the room? No. As there are no further questions, I now put the motion for that resolution be approved as set out in the Notice of Meeting. Okay. So everyone has voted. And now we go to Resolution 2, relates to the reelection of myself. And I have to leave the chair. So I'll now pass over to Kate Thorley to handle this resolution. Thank you.

Thanks, Geoff. Geoff, would you like to make a short speech regarding your reelection?

Look, thank you, Kate. WAM Capital is obviously the first listed investment company that we floated 26 years odd ago. And I've fortunately been in the chair since then. The -- when we floated, we had 2,000 shareholders. In the first 2 years, 35% of our shareholders sold and we went down to 1,300 shareholders. And then we realized that rather than going talking to the brokers about finding people to invest, we needed to communicate to our shareholders. And that probably started the journey of trying to engage and communicate with our shareholders over time. For those that -- sorry about today that -- well, for those that came to our earlier AGMs in the History House and got -- I think in our first AGM, we got donuts that were all -- we had stale donuts, but we've lifted -- well, I haven't tried the food out there. I hope we've lifted the food up a standard since then. Sorry, I'm just rambling now. I'll throw myself to the mercy of the shareholders and let them decide my fate. Thank you.

Thanks, Geoff. Okay. You may now submit any questions or comments that you have with regards to Resolution 2 now. The proxies are on the screen. And for the open proxies which have been granted to the Chair, I will be voting in favor of the resolution. Are there any questions in the room for the Chair? No, nothing. Very good. Any questions online?

Nothing online, Kate.

Very good. So as there's no further questions or comments, I now put the motion that Mr. Geoffrey James Wilson be reelected as set out in the Notice of Meeting. You are a shareholder or a proxy holder and eligible to vote online, could you now please complete your vote for Resolution 2? I'll now pass back to Geoff. Thank you.

Thanks, Kate. The -- So now we'll go to Resolution 3. This is the reelection of Kate. So you can continue on. Well, Kate can [ I ] -- well, Kate has been with us for 20 years. So can you take us from 20 years to now? That's right. You did the first couple of years. No. So I'd like to pass over to Kate. Is there anything in particular you'd like to say, Kate?

Just, I guess, echoing what Geoff was saying, I mean, for most of you who, or may or may not know me, sorry, I'll take a step back. So I've been with Wilson Asset Management now for almost 20 years and as CEO since 2011, and prior to that was a Chartered Accountant and sort of grew up in country Queensland, spent most of my 20s in London and Ireland. I was just reminiscing with [ PIP ] and then moved to Sydney and joined Geoff and the team of 6, I think there were of us, at Wilson Asset Management. And look, probably where I spent most of my time is with the team, our amazing and very talented team, but also on this shareholder engagement piece, which is so incredibly important when you're managing your capital in the various listed investment companies. So as a team, we all pride ourselves on ensuring that shareholders understand how we're managing your money and always looking at ways to engage with you and take on your feedback and ensure that we're always looking to improve not only how we're performing within the portfolios, but also how the share prices perform over time. So, with that, I really do hope that I can continue on as a Director of WAM Capital, and I'll pass back to you, Geoff. Thank you.

Thanks very much, Kate. So, the proxies are up on the screen. And going forward, we'll be announcing the proxies to the exchange before the meeting, so everyone can see them, as an improvement on communications with shareholders after suggested by Stephen Mayne, and good suggestion, Stephen. The -- Do we have any questions online, Ophelia?

Nothing, Geoff.

Any questions in the room? No. I now put the motion that Kate Thorley be reelected as set out in the Notice of Meeting. Please -- if you are in the room, please vote on the device you've been given. Anyone online, please also vote. So I will -- I'm going to declare the poll closed in a second or 2. Before -- or do we do the questions? We'll do the questions. Yes. So anyone -- can please everyone vote? Because after the questions, I'll be declaring the poll closed. So we've got a few general questions on -- actually, why don't we take them in the room? Any general questions in the room? And then we go online.

Yes. Okay. So if we can go [ Ana ].

Thank you, Mr. Chairman. I was just wondering if you have any knowledge or understanding of why recently WAM Capital was listed in the newspaper as a company that was $4 billion of value and paid absolutely no tax? Did you see that article?

The -- I didn't see that exactly -- the exact article. It was like -- I saw the data.

It was a list of companies.

Yes.

Some of which were very dubious in my view.

Yes, yes, yes.

All of which paid no tax.

Yes.

And second last for the sake of the argument --

Yes.

Was WAM at $4 billion?

Yes, yes, yes. Okay. Why don't I -- Jesse, our CFO, why don't I pass over to Jesse to take you through that?

Yes. So that measure looks at the turnover of the portfolio. So the $4 billion has come from -- so when we buy and sell securities, the tax office looks at our size with respect to our turnover, so on the sale of our securities. So given the fund is around that $1.7 billion mark and we turn the portfolio over 2 to 3 times a year, that's how they get to that sort of -- I mean, that $4 billion of value that they record us in those reports, to look at then the tax that you pay on that revenue. Obviously, the -- how our tax situation works is very different. You have to consider both our buying and our selling in terms of what our realized gains on positions are, that works at our tax position. So just taking out gross turnover of $4 billion, that's not what we get taxed on. So it is rather misleading, including listed investment companies in those reports, but that's why we're included from that size perspective, just given the turnover. But the tax -- I mean, the way we pay tax, it comes in 2 ways. Partly our tax is taken care of by the flow-through dividends we get from other investments in the portfolio. So when we get fully franked dividends on the portfolio, obviously, we don't have to pay tax on that income. We can utilize the franking credits like shareholders can utilize them, and then we pay tax on the remainder. And generally, in a year that, say, for example, if the portfolio is up 10% and you've got a tax bill of 30%, normally 2/3 comes in the actual physical payment of cash and 1/3 comes from the flow-through dividends that we get on the investment portfolio. But we definitely pay quite a lot of tax each year, obviously, paying out that franking to shareholders. Those tax office reports, unfortunately, pick up some very unique numbers in our tax return and don't really tell the full story.

So in theory, the numbers in the article didn't include the tax we paid?

I don't think so. And it also --

Yes. Yes, that's what I said. Yes. Yes. Yes.

Yes. But it's just unfortunate, it's how the tax office releases the data. It picks it up on certain parts of the tax return and doesn't -- if you look at our financial statements, you'll see the tax that we pay in there.

Yes, we should.

We will.

Yes. Do you remember who it was?

[indiscernible]

I remember. Yes, I saw -- like the tax -- I saw it online because yes, someone sent it to me. Yes. But I actually didn't see the newspaper article. I didn't realize we made it that far. Yes.

Yes. Thank you for the exciting news. I'm looking forward to the much improved doughnuts this year. I hope they're not the ones left over from the first meeting, but --

Or the last year it was.

Just like -- since tax is the topic of discussion, I'd just like you to let us know what the current position is with franking credits in this fund since WAM Research has gone now to partially frank dividends?

Yes. And Jesse, do you want to go through why that partially franked? And yes, why don't I pass it over to Jesse. Yes.

I mean very similar position to WAM Research. I mean, to Geoff's point before, at the start of last financial year, we had around $0.016 left in the profits reserve after the payment of that final $0.0775. So, all the dividends that have been paid during this year have come from the performance of the investment portfolio. And there is a timing difference, obviously, in generating the performance and paying the tax. So whilst the performance had been generated and the profits reserve was available, there is that timing difference in sort of that performance and realization and the payment of tax. And unfortunately, we had enough to maintain the dividends at the cash amount, but we didn't have enough in the franking balance to fully frank the dividend. So we thought it was prudent given the available franking we had and the expectation of that flow-through dividend yield that I mentioned, that we could maintain that 60% franked. And that's sort of at the moment where we are based on the profits reserve available and the available franking credits that we expect it to be around 60% franked. And as we mentioned in WAM Research, obviously, if the portfolio can continue years, like last year, up 26% and generating big amounts in the profit reserve and obviously, the realization of that, that would be the pathway to getting back to fully franked.

And just on that, there was a question online, which I'm aware of, that how long the -- will the dividends be franked to 60%?

At this stage?

Well, actually, in terms of paying the dividends, how long will we pay the dividends in terms of where the profit reserve, where we can still make profit? Cast our mind back in the GFC, there was a period there where we didn't have any profit for a 6-month period, so we couldn't pay a dividend. So would that provide -- So yes, the 2 parts to the question that came in online is, how long will the 60% dividend be paid? And when will we go back to 100%, any ideas? It's a guess, isn't it?

It is a guess. At this stage, we foresee that the FY 2025, if the fully franked dividends are to be maintained -- sorry, if the dividends have been maintained at the $0.155 over the year, we expect it to be 60% franked. We would need some consecutive years sort of performance well above that 16% per annum that's required just to maintain the dividends to sort of edge back to that fully franked territory. That would be the pathway back to fully franked.

Just so that I can understand it a little better, do you pay your tax on the 30th of June each year, and therefore, that's when your franking balance increases presuming you made a profit? And the other thing is the franking credits you get from dividends in the companies you invest in.

Yes.

And when you make a loss, does that wipe out the franking credits that you get from the dividends? Or are they in a separate bucket?

Yes. Just quickly on that one, we get to keep them. Even if we had a loss, any franking that we get from the investments in the portfolio. We get to keep that in our franking account, which is obviously separate to the balance sheet and can pay that out. I mean I would love to pay the tax bill at 30th June every year, once a year. Unfortunately, the tax office has a very different view on that. So we're on regular installments generally throughout the year, so monthly. So if you're ever looking at our NTAs, we try and tell you -- obviously, the franking account is disclosed in the annual report every year. But each month if we're paying tax, there's a disclosure in the NTA which is telling you essentially the cents per share amount, that we're paying in tax. So you can always keep an eye on when those tax payments are happening. And it is good to remember because it does come out of the pre-tax NTA when we're paying that cash away to the tax office. But we try and manage the cash flows quite closely because we, A, don't want to have a big impact to the investment portfolio performance in generating that for shareholders, but B, obviously, we're conscious of the franking accounts and managing that at the same time to maintain dividends.

So the installments that you pay are calculated by the tax department based on your previous year? Is that how it works, like divisional tax?

Yes, that's the default position. Obviously, we can vary those installments based on the performance for the year. So if that installment is based on, say, performance and profit generated on 10%, but this year we're at 20%, 30%, we'd be varying that installment to not make a big cash outflow, say, at the end of the year or when the tax return is due, we want to just be paying that along the way.

And if you've paid too much tax and you get a refund, is that -- how is that handled in terms of your franking balance?

Yes. So if we did ever pay too much tax and we get a refund, that does reduce the franking account when you get the refunds. I mean, there's been very few instances we've overpaid. We try and manage that closely. So we're never getting any money back. It's more sometimes there's a final top-up payment when we do our tax return in any event.

Right. And we have a question over there.

As always, thanks for your time today and throughout the year. Wayne Perry is my name, and I'm here with our super fund and our personal holdings. I just want to talk a little bit more about the profit reserve just in terms of the -- if you will, the management strategy of it. I mean, if I look at Page 5 on the report, I see it's got $0.147 per share as at June -- 30 June, with a coverage of 0.9 years. And Geoff has talked to some years during COVID you couldn't pay and -- et cetera, et cetera. So my question is, is there a deliberate managing -- management strategy for a number of years of dividend coverage that you retain in the profit reserve? Or is it just a number that comes out in the wash and you look at it and if it's 6, that's great. And if it's 0.6, well, that's great. It's just whatever it is. And I'm presuming as part of this, it can't be negative, because otherwise you're going to be selling things to pay dividends. So can you just talk to the thinking behind that?

Yes. The -- How the profit -- How we started announcing the profit reserve was probably, just go back over time with listed investment companies, some people don't understand how they generate profits and the ability for them to pay dividends. So I mean, we're a trader for tax purposes. So say if we start with $100 million, or $100, so we go up 10%, then it goes up to $110. So then in theory, we've made $10 pre-tax. So we -- so there's no franked dividend we received. So we're going to pay $3 of tax, then we can, in theory, pay a dividend of $7. Yes. Now -- and then we pay that dividend out of $7 and so the assets go back to $100. We're not like an operating business -- well, we're not like an operating business selling widgets where we make a profit each year. Our profit is the performance of our portfolio. So if we start at $100 and there's nothing in the profit reserve and the portfolio goes down, there's no profit. And therefore, there's no dividend. And in terms of -- so a number of years ago, well, over the sort of 26 years, we've been trying to explain to people how it works. And then we started talking about our work, our ability to pay a profit is how much is in the profit reserve. And so, then we -- then -- it's a number that just happens. In terms of how much would we like in there, as directors, of course, we'd like as much as possible, like we'd like 2 years or 3 years of profit reserve in there. So our ability to keep paying dividends -- we have confidence in our ability to keep paying dividends. Now as I mentioned earlier, and Jesse mentioned, like pretty much after -- 1 year ago, after the final dividend being paid, we virtually had nothing there. So if the portfolio -- if the team hadn't performed as well as they did, then there would have been no dividends. Does that sort of explain?

Yes.

And Jesse, was there anything you could add? Yes, there's not --

The number just as it turns out?

Correct. Yes, and in theory, like you could argue, and there's a good question about that, which I'll answer, you could effectively [ say go ] -- and I think we used this example in the annual report, [ say ] -- do we use that example in the annual report? Do you want to go through it, Jesse?

Yes. I mean just something that would remind all shareholders -- there's a lot of detail in the Chairman's letter in the annual report, and part of that detail is just explaining that, I mean, over the past 5 years, the investment portfolio was up around 10% per annum. It outperformed the All Ords and outperformed the Small Ords from an actual assets' perspective, but we were paying out around 14% grossed-up, including tax per annum to shareholders. Now what that has meant is the NTA and the share price has gone backwards. Returns have been more income than any capital. It's actually been a slight capital loss. And we do need to add back the dividends, but the reason that's been able to happen was the profits reserve that was available pre-COVID. So the profits reserve there enabled us to sort of maintain the dividend and then the profits that were generated sort of each year, we've been able to maintain the dividend. But the 2022 year was probably the big year when the market was down considerably, and we also maintained a big fully franked dividend during that time. So that's sort of, I mean, the story as to where we are in the profits reserve now and why we only had sort of $0.016 left sort of at the start of the financial year. In the annual report we actually go through a scenario which was a conversation at the time sort of around that COVID period in terms of cutting the dividend, and if we'd cut the dividend 50%, what the NTA would be today, which sort of -- at 30 June, it would have been sort of up back closer to that $2 mark. And the return in total would be the same, but it would be a different combination of income and capital growth. So shareholders have received a high income component and franking credits and have not seen any capital growth. It's been slight capital loss over that period. But if we were to sort of go back and change that decision, the NTA would be higher and the share price would be higher, but you would have received a lot less in the dividends over that time.

And actually, here's -- I know we've got a question online, Ophelia, which sort of spells out -- the answer spells out exactly that point. Do you want to ask the question?

Yes, definitely.

This isn't a direct -- It just happens to be -- sit perfectly. Yes.

No. This came from Charlie and [ H&G Lowell ]. Super. So both invested in their SMSF in WAM in 2015, one at $2.07 and one at $2.03. They've said that dividends have been steady, communication has been good, but the share price has been 30% lower than the initial investment for some time. Does the Board have any insight to this as to when the value will return?

And maybe just one additional comment before. Over that time period as well, the shares were probably trading on average at that 20%, 25% premium to NTA, at one point as high as a 30% premium, and that premium has come down at 30 June, it was at a slight discount. So that's also been an impact to the share price level over that time period as well.

Yes. So there's that. And then the interesting thing is the actual portfolio, the WAM portfolio was up 11.1%. Now let's say the management fees per annum -- So let's take 1% of management fees, so broadly 10%. And the All Ords was up 9.6%, so that slightly outperformed the all ords, and the Small Ords was up 7.6% over that period. And the interesting thing is the dividend that was paid on that -- for that investor, he got $1.52 in fully franked dividends over that period, which would relate to -- which -- if it was -- if he could get the refund back about $2.14. And so to me, that's the hard part. We've actually been paying sort of a super -- we've been paying out more than what we've got in there. So the big debate every dividend is, hey, look, do we -- are we better off? And the example we used in the annual report, we're giving you a better yield. If we cut the dividend before at the start of COVID, we'd be giving you a better yield than the market fully franked, plus you'd have capital -- you'd feel wealthier because your capital is $2. How we've given you your capital is by fully -- by -- well, fully franked dividends up until this year. So to me, that's -- each Board meeting with capital management, [indiscernible], do we keep the dividend, do we cut it, et cetera, et cetera. And so, what we've decided to date is, well, we're -- and really, like the tough part is, the investment guys have done an exceptional job. But you as shareholders are saying, well, hold it, doesn't feel that exceptional because I bought at this price, I don't -- I assume I get my dividends for free and it's here. Anyway, that's the -- does that help sort of answer it a bit?

Yes. No, in summary -- and I'm thinking while you've been speaking, so, thank you. In summary, you can argue that there's actually -- if you take the whole bucket and you divvy it up into 2 things and you call it NTA and dividend, there's money moving from one bucket to the other, and you're making decisions in effect about where the money is going in from which bucket.

Yes.

And it really comes down to that. And that's fine.

Yes. No. Thank you. Any other questions in the room? Yes. Yes.

Thanks for the update on the finance. I'm just touching on the point about the share price. I basically bought WAM. I've got to say your food during the WAM conferences are very good. I was hoping to have good food. That's why I come to this first AGM.

The highest --

I got to compliment you for the food at WAM conference. My question is basically, I've got your shares in my personal portfolio that I can write-off losses, but I can't write-off losses in my SMSF. I've been monitoring the shares for the last 3 years. Unfortunately, I bought it at a premium price, as what the other gentleman was saying. But overall, the dividends are good. So at the moment, it's breakeven. So I have been thinking, should I rotate WAM out of my portfolio? But I've trust in you, Geoff. So I'd like to know from your team's perspective, now with Trump coming in and most of WAM shares are in the small and mid-cap, I'd like to hear from your team what's the strategy moving forward and if the price may slowly climb back up with Trump being the President of the U.S.A.?

Okay. And that question is pretty much around -- of course, we can't give tax advice, or advice. Now what we try to do is buy things at a discount. Now WAM is trading a little bit of a discount. So you're not paying a premium. But in terms of the outlook for the portfolio, I'll pass over to Oscar, who manages the portfolio.

Thanks, Geoff. I appreciate the question. I think the market always likes certainty. And I think going into the election, the fact that Trump effectively got in was good for the market because we've had precedents back in 20 -- obviously, through the first term, 2016 to 2020. It was actually very good for markets and good for business, and I think that's the key. I think at the same time you've got rates coming down in the U.S. So I'd say in terms of our portfolio and how we're thinking about things is you want some companies that potentially are exposed to the U.S. because we think things will get better. There's also talk about less regulation. So we've seen companies such as [ Square ] that we own, which is obviously the takeover of Afterpay years ago, that's done incredibly well for us over the last 6 weeks or so, Zip Money as well. So we're looking at exposures within the portfolio that are in the U.S. We've also seen the Australian dollar fall, which is good, obviously, for exports and so forth. So companies who are in the portfolio with an exposure to United States come to mind such as Corporate Travel, we've been buying, ALS Limited on the mining services side and in particular has a very strong U.S. exposure. So ultimately, we think it will be very good for markets and small cap companies.

Okay. And just on that, the -- if anyone -- from 12:30 p.m. to 1:30 p.m., the investment guys -- we've got a break between the AGMs, so you -- the investment guys are here, so you can ask them any questions about any stocks or any other market questions. So thanks, Oscar. Thank you. Any more questions in the room? Yes, question -- just the lady up there, and one down here, Oscar, do you want to pass yours to the gentleman here?

My question is just a follow-on from the last one in that, it's really to Oscar, I suppose, whether a fall in interest rates will also assist the value of the portfolio going forward?

Yes. And Oscar, can you -- will you be staying until 12:30 p.m. or not? Can we answer that there? Is that possible?

Yes, unless you can give us a quick answer now.

I'll give you a really quick answer. It will be very good for the portfolio.

And he'll tell you why. At 12:30 p.m., he'll tell you why. And I better use New Zealand as an example. Yes. So I think I know -- yes.

Thanks, [ Joe ], personal and corporate owner.

Yes.

Look, I appreciate those comments about the past asset NTA issues and so forth and Oscar's comments briefly about the future. I did want a better picture on expectations ahead. Maybe you can advance that? And I also note Wilson Asset has been involved in a lot of takeover of the funds over the last year or 2.

Yes.

Is that going to continue? What's the benefits, pros and cons --

Yes.

On continuing in that direction?

Yes.

Because that does also affect the share price quite a bit?

Yes. Usually when -- I mean, in terms of the opportunities present themselves, we will. And usually, pretty much all the deals we've done, it's been a benefit to shareholders. Like we've actually bought the assets cheaply and -- is the first thing. And the second thing is, some of them have had a secondary benefit. Those companies have franking in them as well. So the primary benefit is getting a better return, and that's the secondary benefit. Yes. Yes, but not -- on a per share basis, we're not diluting. On a per share basis, we're actually going up. So anything online before we --

Yes, Geoff, I've got about 5 questions online. Two from [ Stephen ]. First one is, we've been a big investor in Star Entertainment and have lost large chunks of capital as the casino company created --

Well, we -- doesn't own any -- WAM Capital doesn't own any yet.

Yes. And then --

Had we ever [ had ] Star? No, we never owned Star. Yes.

Can you please name 3 [ worst ] investments over the journey, but don't just focus on the negative and please mention our 3 or 4 best investments?

Well, worse, that's easy. NextEd, NXD, EML Payments, EML and SmartPay, SMP. I would say learnings, look, for us, sort of big fun. That's it.

12:30 p.m., and 3 best?

3 best.

We got learnings at 12:30 p.m.

Learnings at 12:30, I like that. TUA, TPG Singapore, GDG, Generation Development Group and Sigma, Chemist Warehouse.

Yes.

Next question. How exposed are we to a hostile shareholder resolution to either reduce the management fee or internalize management to save costs, similar to what happened to various externally managed Macquarie vehicles after the GFC? If shareholders decided they want to sack Wilson Asset Management as the manager, what sort of go away fee are we currently contractually obliged to pay, if any?

Yes. Well, in theory, that's -- shareholders decide. So that's the answer to the first part. And what -- I don't know, I'd have to get our lawyers here to find out how much we want to get paid. So there's -- Jesse, you want to --

Yes. I mean I'm pretty sure it's in the original prospectus of the company. It's normally the previous 12 months fees on termination.

Yes.

Including management and performance fees.

Yes. Next one.

Question from [indiscernible]. WAM's ability to include LIC capital gains when paying dividends?

Yes. We don't have any LIC capital gains because we're a trader for tax purposes.

John has asked, can you provide reasons for the large drop in the share price? What are the prospects for the share price in the next 12 months?

Yes. Well, that's a function of performance and the -- going from a premium to a slight discount and paying -- and we are [ now ] actually paying sort of super dividends. Yes.

And last question from [ Stephen ] is, will a full unedited copy of the AGM webcast archive be made available on the company's website? And why not lodge a full copy of the transcript at the ASX?

Yes. That's a good one. Why not?

Yes.

We haven't decided, why not? But thank you, [ Stephen ]. Always -- Yes, always good feedback. We enjoy having you. I hope you're a shareholder. I hope you own more than one share, asking those questions. That can be in the transcript if we lodge it. Any other questions in the room? Yes.

Nick [ Bolton ], we still caught up with Nick [ Bolton ] and this week --

We deal with that, that's in WAM Active as an owner -- WAM Capital has a really small amount. Well, actually, yes. What is it? Sorry. The matter is before the court. That's your [ team ] Your Honor. Yes. No, I mean we've -- are we allowed to say why we've taken in the court? Because we think -- I can't say it's stolen, can I? No. No. No, we think something's gone missing. Yes. But, yes -- No. I can't say that, sorry. So why don't I declare the poll closed? Why don't I declare -- and we'll close the meeting? Yes. Okay. And now we've got a 15-minute break. We've got a quick morning tea. Thank you very much.