WAM Active Raises $70.7M Amid 40% Portfolio Surge: What’s Next?

Entitlement Offer Details

WAM Active Limited (ASX, WAA) has announced a significant capital raising initiative through a two-for-three pro rata non-renounceable entitlement offer priced at $1.00 per new share. This price represents a 7.8% discount to the closing share price on 29 January 2026. The offer is expected to raise approximately $70.7 million, with an additional $19.3 million to be raised via an institutional placement due to strong demand from wholesale investors.

Eligible shareholders can also apply for additional shares under a top-up facility, subject to board discretion. The new shares will rank equally with existing shares and will be entitled to the fully franked interim dividend of 3.2 cents per share and a special fully franked dividend of 1.0 cent per share, reflecting the company’s commitment to shareholder returns.

Robust Portfolio Performance

WAM Active’s investment portfolio has demonstrated remarkable strength, delivering a 40.6% increase year-to-date and an estimated 7.0% gain in January 2026 alone. This performance significantly outpaces key market benchmarks, underscoring the effectiveness of the company’s investment strategy focused on exploiting mispricing opportunities in the Australian equity market.

The portfolio’s outperformance is a testament to the experienced management team led by Chairman Geoff Wilson AO and CEO Kate Thorley, supported by a seasoned investment team. Their disciplined approach has consistently identified value in small to mid-cap Australian equities, driving strong returns for investors.

Strategic Use of Capital

The proceeds from the entitlement offer and placement will be deployed in line with WAM Active’s proven investment process. This involves capitalising on short-term market inefficiencies arising from corporate actions such as IPOs, placements, takeovers, and arbitrage opportunities. The company’s flexible approach allows it to adapt to evolving market conditions, aiming to sustain its track record of outperformance.

Shareholders who participate will benefit not only from potential capital growth but also from the attractive dividend yield, with an annualised fully franked interim dividend yield of 6.4% on the issue price and a grossed-up yield of 9.1% including franking credits.

Risks and Considerations

While the offer presents an opportunity to participate in WAM Active’s growth, it carries risks. Shareholders who do not take up their full entitlement risk dilution of their holdings by up to approximately 47.8%. Market volatility, regulatory changes, and the performance of the investment manager are additional factors that could impact returns.

The company cautions investors to consider these risks carefully and to seek appropriate financial advice. The discretionary nature of the top-up facility and shortfall offer allocations introduces some uncertainty regarding final share allocations.

Offer Timetable and Next Steps

The entitlement offer opens on 6 February 2026 and closes on 20 February 2026, with new shares expected to commence trading on 3 March 2026. The institutional placement will be settled shortly after. Eligible shareholders will receive detailed offer booklets outlining participation instructions.

Market participants and analysts will be watching closely to gauge subscription levels and the impact of the capital raise on WAM Active’s valuation and future performance. The company’s forthcoming January investment update, due by 13 February 2026, will provide further insight into portfolio developments.