Salvation on its way finally!, page-19

Jusr a reminder as to why investors are probably not happy. Down 24% in the last 5 years. And the bear market is where ????? Playschool again ? There’s a chair (man) in there, and a bear as well ! But Where ?

And let's not overlook the Watermark-managed Australian Leaders Fund (ALF), the subject of multiple conversations with disgruntled investors.

A bit of digging through its annual report reveals a nugget that's infuriated shareholders even further.

And that's the juicy fee which heads to one Geoff Wilson every year.

ALF has traded below its net tangible asset backing since mid-2017. Its share price is down 24 per cent in the past five years.

Wilson Asset Management's boss is a non-executive director of the LIC and is raking in the fees, via an 80 per cent stake he owns in Boutique Asset Management.

Boutique is paid 25 per cent of Watermark Funds Management's management and performance fees.

Watermark was paid a management fee of 1 per cent of gross assets in 2019, amounting to $2.9 million net of reduced input tax credits.

Also on ALF's board is Clime Asset Management's John Abernethy, but he doesn't appear to have wangled the same deal.

Wilson told Street Talk the ALF was originally called the Wilson Leaders Fund, which he floated in 2004 and was managed by Justin Braitling.

When Braitling went off to set up Watermark he took the fund with him and Wilson agreed to restructure it so Braitling took 75 per cent of the fees and he took the remainder.

"To me it's been very clear from the start," said Wilson.

At December 2019, ALF's net tangible asset backing before tax was $1.17 and its share price closed at 99¢ on Wednesday afternoon.

According to its December investor update, the LIC has almost zero net equities exposure, as its long positions are offset by its shorts.

It's these sorts of figures that have raised the ire of investors like Affluence Funds Management's Daryl Wilson and activist investor David Kingston.

In any case, Street Talk reckons this fine print fee could add fuel to the fire. Perhaps there's another LIC due for a shake-up?