Ann: Becoming a substantial holder from WAM , page-4

Wilson-Investment


Investment Objectives

The investment objectives of the Company are to:

•(1) achieve a high real rate of return, comprising both income and capital growth, within risk parameters acceptable to the Directors;

•(2) deliver investors a secure income stream in the form of fully franked dividends; and

•(3) preserve the capital of the Company.


Investment Philosophy

The investment philosophy of the Company is exemplified by the following broad principles:


•The Company’s philosophy is to invest predominantly in industrial companies with an emphasis on companies that are under-researched and mispriced.

•The Company’s preference is to invest in industrial companies that have a proven track record of profit and dividends.

•The Company will undertake investments on a portfolio basis. While all investments will be considered on a case-by-case basis, the Company will usually refrain from taking a majority position in investee entities unless the opportunity is compelling. This will assist the Company to diversify its investments and so reduce its exposure to abnormal falls in the market price of any single investment.

•The Company believes it will achieve acceptable diversification by owning Securities in 30-50 investee entities.

•The Company will seek to manage investment risk by spreading investments over a range of industry sectors.

•The Company may invest in Securities quoted on a securities exchange located outside Australia if the Board considers that the reporting obligations and trading procedures applicable to that exchange are no less rigorous than those of ASX.

•The universe of potential investments for the Company will be all Securities quoted on the ASX or other exchanges, bills of exchange, other negotiable investments, debentures and other permitted investments identified below. The prime focus will be on listed entities that exhibit the investment characteristics outlined below. The Company believes a number of these entities will be found in medium sized industrial companies but size will not be a limiting factor for inclusion in the Company’s Portfolio.


Investment Strategy

The Manager has two investment approaches:

Research Driven – We undertake extensive research (over 700 company meetings each year), focusing on the free cashflow then rating the company with respect to management, earnings growth potential, valuation and industry position. We only buy when we can identify a catalyst or an event that will change the valuation the market gives to the company.

Investment Driven – The investee company has a sustainable business model, a track record of profit making and dividends, generates positive free cashflow, acceptable financial strength and generates a sound return on equity.



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