Legacy Asset Exits Could Challenge WAM Alternative Assets’ Dividend Franking
WAM Alternative Assets Limited has announced a 15.4% increase in its fully franked final dividend, reflecting robust portfolio gains and a confident outlook under Wilson Asset Management's stewardship.
- 15.4% increase in fully franked final dividend to 3.0 cents per share
- Investment portfolio up 5.3% in FY2025 and 8.9% per annum since 2020
- Portfolio diversification across private equity, water, infrastructure, real estate, agriculture, and private debt
- Profits reserve covers 2.4 years of dividends, supporting dividend sustainability
- Legacy assets, comprising 19% of portfolio, expected to be exited in FY2026
Dividend Increase Signals Confidence
WAM Alternative Assets Limited (ASX – WMA) has declared a fully franked final dividend of 3.0 cents per share for the 2025 financial year, marking a 15.4% increase over the previous year. This uplift brings the full year fully franked dividend to 5.7 cents per share, delivering a compelling 5.9% dividend yield, or 8.4% when including franking credits. The announcement underscores the board’s confidence in the company’s revitalised investment portfolio and the improving outlook for private markets.
Strong Portfolio Performance Under New Management
Since Wilson Asset Management took over as investment manager in October 2020, WAM Alternative Assets’ portfolio has grown at an annualised rate of 8.9%, with a more measured volatility profile compared to public markets. The portfolio increased 5.3% in FY2025 alone, supported by 15 successful investment exits at an average premium of 33.6% to net tangible assets. This steady performance has contributed to an operating profit after tax of $6.2 million for the year.
Diversification and Strategic Asset Allocation
The company’s portfolio is well diversified across several alternative asset classes, including private equity (26.9%), water (15.5%), infrastructure (15.1%), real estate (11.3%), agriculture (7.0%), and private debt (4.3%). Approximately 19% of the portfolio remains invested in legacy assets inherited from the previous management, which the board expects to exit during FY2026, further streamlining the portfolio’s strategic focus.
Dividend Sustainability and Future Outlook
WAM Alternative Assets maintains a profits reserve of 14.2 cents per share, sufficient to cover dividends for 2.4 years, providing a strong buffer for shareholders. Portfolio Manager Nick Kelly highlighted that the revitalisation strategy is largely complete, and the company is entering a growth phase driven by operational improvements and earnings growth across its institutional-grade private market investments. The company’s listed investment company (LIC) structure also offers intraday liquidity, a notable advantage in the private assets space.
Engagement with Investors
To provide further insights, WAM Alternative Assets will host a Q&A webinar on 2 September 2025, featuring Chairman Geoff Wilson AO and Portfolio Manager Nick Kelly. This session aims to update investors on portfolio developments and the company’s strategic direction.
Bottom Line?
WAM Alternative Assets’ dividend boost and steady portfolio growth signal a maturing investment phase, but the exit of legacy assets and future dividend franking remain key watchpoints.
Questions in the middle?
- How will the planned exit of legacy assets in FY2026 impact portfolio returns and volatility?
- What measures will WAM Alternative Assets take if future dividends become only partially franked?
- Can the company sustain its dividend growth amid evolving private market conditions?
