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New WAM Alternative Assets LIC appoints portfolio manager

Cloud against blue sky with cash falling from it representing rich investors
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The soon-to-be-defunct Blue Sky Alternatives Access Fund Ltd (ASX: BAF) finally has a new portfolio manager. Blue Sky, which is set to morph into WAM Alternative Assets Ltd (ASX: WMA) sometime this week, has had a long and tumultuous period of maladministration over the past few years.

Wilson Asset Management bid for the company last year, and received the endorsement of Blue Sky’s weary shareholders a few months ago. Ever since, the company has been in transition mode. But this new appointment looks set to be the final chapter in Blue Sky’s history. 

WAM Bam, but thank you ma’am?

Wilson Asset Management (WAM) is about to add WAM Alternative Assets to its existing stable of 6 Listed Investment Companies (LICs), which includes the well-regarded WAM Capital Ltd (ASX: WAM), WAM Leaders Ltd (ASX: WLE) and WAM Research Ltd (ASX: WAX) companies.

Up until now, the company has remained rather coy on who will be heading this newest LIC, only telling investors last month that the person selected would be a “highly experienced and credentialed portfolio manager”.

But yesterday, WAM finally told investors that the new LIC will be headed by Dania Zinurova.

According to reporting in the Australian Financial Review (AFR), WAM recruited the investment veteran from the investment services arm of insurance and financial services giant Willis Towers Watson, where Ms Zinurova led research teams with coverage across equities, credit and alternative assets.

Regarding some of Ms Zinurova’s intentions with the new LIC, the AFR quotes Ms Zinurova as stating an “intention to steer away from traditional alternative assets such as toll roads and airports, the highly credentialled investment professional plans to look at infrastructure assets such as data centres, echoing the growth-over-value focus in sharemarkets”.

The idea is “to see where are the strong tail winds that we see in the market, for example, digital infrastructure [and] renewable energy”, the AFR quotes Ms Zinurova. “Those are assets if you look at their underlying contracts and income and capital appreciation, they would be less linked to GDP compared to more traditional infrastructure.”

Is Blue Sky worth a look today?

I think it is, for 3 reasons. Firstly, alternative assets are a useful area to explore in my view, particularly in this era of near-zero interest rates. The whole point of alternative assets is that they are less correlated to the returns of the broader stock market. This can be very useful for an investor’s portfolio. Especially if the investment is also generating substantial dividends (which WAM is known for providing).

Secondly, Blue Sky shares are still trading below their Net Tangible Asset (NTA) backing. Blue Sky’s most recent market update told investors that, as of the end of August, the fund’s NTA per share came in a $1.0823. The current Blue Sky share price if 92 cents. That’s a ~15% discount on offer right now.

Thirdly, WAM director Geoff Wilson is buying Blue Sky shares hand over fist. ASX records show Mr Wilson has purchased significant parcels of shares every day this week so far. As well as last week. If that’s not a vote of confidence, I don’t know what is.

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Motley Fool contributor Sebastian Bowen owns shares of WAM Research Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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