Can WAM Active Sustain Growth After $70.7M Capital Raise at Discounted Price?

Capital Raise to Fuel Growth

WAM Active Limited (ASX – WAA) has unveiled a significant capital raising initiative, offering shareholders the chance to increase their holdings through a 2-for-3 pro-rata non-renounceable entitlement offer priced at $1.00 per new share. This price reflects a 7.8% discount to the company’s closing share price of $1.085 on 29 January 2026, providing an attractive entry point for investors. The offer aims to raise approximately $51.4 million, with new shares qualifying for fully franked interim and special dividends.

In addition to the entitlement offer, WAM Active is conducting a $19.3 million institutional placement, responding to strong demand exceeding the entitlement offer itself. This placement will be issued at the same discounted price and is expected to complete alongside the shortfall offer in early March 2026.

Strong Portfolio Performance Underpins Confidence

The capital raising comes on the back of impressive portfolio returns. WAM Active’s investment portfolio has surged an estimated 7.0% in January 2026 alone and 40.6% since the start of the financial year. Since its inception in 2008, the portfolio has delivered an annualised return of 13.0%, outperforming the S&P/ASX All Ordinaries Accumulation Index by 6.9% per annum. This performance is attributed to the company’s active trading strategy focused on exploiting market mispricing opportunities within the Australian equity market.

Chairman Geoff Wilson AO emphasised the equitable opportunity the offer provides shareholders to deepen their exposure to WAM Active’s proven investment approach, which balances strong returns with capital preservation and low volatility.

Dividend Yield and Shareholder Benefits

New shares issued under the entitlement offer will be eligible for a fully franked interim dividend of 3.2 cents per share and a special fully franked dividend of 1.0 cent per share. This translates to an annualised fully franked interim dividend yield of 6.4% and a grossed-up yield of 9.1% based on the issue price, offering a compelling income stream for investors.

The offer also includes a Top-Up Facility, allowing shareholders who fully subscribe to their entitlement to apply for additional shares beyond their allocation, subject to board discretion and regulatory limits. This facility, along with the shortfall offer and placement, aims to maximise shareholder participation and capital growth potential.

Strategic Implications and Market Positioning

WAM Active’s capital raising is designed not only to fund further investment opportunities but also to enhance the company’s market liquidity and relevance. Increasing the fund size is expected to reduce fixed expense ratios, attract additional broker and research coverage, and improve access to market opportunities. With assets under management at $80.6 million as of December 2025, predominantly allocated to equities, the company is well-positioned to leverage its flexible investment mandate.

Looking ahead, the successful completion of this capital raising could solidify WAM Active’s standing among Australian listed investment companies, reinforcing its commitment to delivering consistent returns and shareholder value.