WCM Global Growth Limited

24 Jun 2019

Gamma Advisory

WCM Global Growth Limited is a listed investment company (ASX Code: WQG) investing in global equities. The Company provides investors with access to an actively managed portfolio of quality global companies found primarily in the high growth consumer, technology and healthcare sectors. 

The investment adviser to the portfolio is WCM Investment Management (WCM), a California-based specialist global equity firm. Founded in 1976, the business is majority employee owned and manages over A$49 billion of assets on behalf of institutional and retail investors around the world, including Australia. 

Investors are being offered shares in WQG at $1.10.  This is a discount to the current share price of $1.125 and also a discount to its Net Tangible Asset (NTA) of $1.231 (after tax).

Key Highlights of this offer:

Outstanding investment performance – WQG’s investment portfolio has produced outstanding performance, outperforming its benchmark since inception and over the past 1, 3, 6 and 12 month periods to 31 May 2019. Portfolio performance has generated an increase in pre-tax NTA per share to $1.458 as at 19 June 2019 from $1.029 at 30 June 2017.

Performance                              Portfolio         MSCI ACWI           Value Add
(after management fees)            (%)                   (ex-Aus) (%)               (%)

1 Month                                               -1.20%                    -4.37%               3.17%

3 Months                                               6.78%                     0.96%               5.82%

6 Months                                             14.93%                     6.90%               8.03%

12 months                                           20.29%                     8.24%              12.05%

Inception (annualised)                       16.67%                   10.21%               6.46%

Performance as at 31st May 2019

Inception is the 21st June 2017

Discount to NTA – WQG’s fully diluted NTA was $1.295 before tax and $1.231 after tax as at 19 June 2019, well above the Option exercise price of $1.10.

Dividends – Shares issued pursuant to the exercise of Options will be entitled to any future dividend payments including the final unfranked dividend of 2 cents per share payable on 16 August 2019. For the 2020 financial year, it is the Board’s present intention to pay an interim dividend of 2 cents per share and a final dividend of 2 cents per share.

Increased scale – the increase in issued capital due to the exercise of Options should improve share trading liquidity, reduce the share price discount to NTA and lower the operating expense ratio of the company.

Investment manager paying transaction costs – WQG will not bear any costs associated with the Options underwriting. The costs will be borne by the investment manager.

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