WAM Capital Limited(WAM)

For

per

sona

l use

onl

y

2

Executive summary

• Investment Portfolio has outperformed by 7.5% financial year to 31 March 2012

• Average equity weighting 58%

• 10% increase in fully franked interim dividend to 5.5 cents per share

• Annualised fully franked dividend yield 6.9%*

• Bonus Option issue on a 1 for 1 basis – ASX Code: WAMOExercise at $1.60 at any time from now to 31 July 2013

• Cautiously optimistic on Australian equity market

* Based on 3 May closing price

For

per

sona

l use

onl

y

3

Option issue

• Bonus option issue on a 1 for 1 basis

• Exercise price: $1.60

• Can exercise at any time up until 31 July 2013

• Options trade on the ASX under the code “WAMO”

For

per

sona

l use

onl

y

4

Option issueFrequently asked questions

Why?• Create value for all shareholders• Increase size of Company - making it more relevant• Continue to grow the Company• Lower the Company’s management expense ratio (MER)

How will the money be invested?• In accordance with the existing investment process:

− Market Driven − Research Driven

For

per

sona

l use

onl

y

5

Consistent outperformance

Performance as at 31 March 2012

1 Yr %

3 Yrs %pa

5 Yrs %pa

10 Yrs %pa

Since Inception

%pa (Aug-99)

WAM Investment Portfolio +3.2% +22.5% +6.1% +13.5% +18.1%

S&P/ASX All Ordinaries Accumulation Index -6.2% +12.3% -1.8% +7.1% +7.5%

Outperformance +9.4% +10.2% +7.9% +6.4% +10.6%

For

per

sona

l use

onl

y

6

Performance Financial Year 31 March 2012

WAM Investment Portfolio +6.0%

WAM Pre-tax NTA per share growth plus dividends +3.2%

WAM Share price growth plus dividends +10.2%

S&P/ASX All Ordinaries Accumulation Index -1.5%

For

per

sona

l use

onl

y

7

Outperformance since inception

WAM Capital outperformed the market by 10.6% p.a. over 12½ years

-

100

200

300

400

500

600

700

800

WAM Capital Ltd - Investment Portfolio (before all expenses, fees, taxes and dividends)S&P/ASX All Ordinaries Accumulation Index

Index re-based

For

per

sona

l use

onl

y

8

Premium / Discount to NTA D

isco

unt /

Pre

miu

m

‐40%

‐30%

‐20%

‐10%

0%

10%

20%

30%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

* To 20 April 2012

*

For

per

sona

l use

onl

y

9

Dividend growth

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Ordinary Fully Franked Dividend Special Fully Franked Dividend Equal Access Share Buy-Back

* Annualised interim dividend

Cents per share

For

per

sona

l use

onl

y

10

Discussion - some recent portfolio changes

New Stocks• Webjet Limited (WEB)• Ethane Pipeline Income Fund (EPX)• Flexigroup Limited (FXL)

Disposals• STW Communications Group Limited (SGN)• Macquarie Telecom Group Limited (MAQ)• Coal & Allied Industries Limited (CNA)

For

per

sona

l use

onl

y

11

Contributors / Detractors

Best Performing Stocks Financial Year to 31 March 2012

Company Strategy Unrealised/Realised Gains

SGI Signature Capital Investments Ltd Market Driven $1,412,041

AGI Ainsworth Game Technology Ltd Research Driven $1,077,752

BRG Breville Group Ltd Research Driven $1,040,702

Worst Performing Stocks Financial Year to 31 March 2012

Company Strategy Unrealised/Realised Losses

CAF Centrepoint Alliance Ltd Research Driven ($863,385)

SYM Symex Holdings Ltd Market Driven ($775,326)

AUN Austar United Communications Ltd Market Driven ($711,944)

For

per

sona

l use

onl

y

12

Top 10 Research Driven stocks as at 31 March 2012

Company % GrossAssets

RKN Reckon Limited 2.6%BRG Breville Group Limited 2.1%MMS McMillan Shakespeare Limited 1.7%COF Coffey International Limited 1.4%SKE Skilled Group Limited 1.3%AMM Amcom Telecommunications Limited 1.2%WEB Webjet Limited 1.1%RCR RCR Tomlinson Limited 1.0%IPP iProperty Group Limited 1.0%MYS MyState Limited 1.0%

For

per

sona

l use

onl

y

13

Ainsworth Game Technology Ltd (AGI) - Research Driven

• Identified opportunity through broker network

• Face to face management meeting at the company’s head office in Silverwater

• Company rated highly on our models

• Identified catalyst – earnings surprise

• Current P/E 13x growing at 50%

For

per

sona

l use

onl

y

14

Top 10 Market Driven stocks as at 31 March 2012

Company % GrossAssets

ELI Emerging Leaders Investments Limited 2.4%IBC Ironbark Capital Limited 1.6%CCQ Contango Capital Partners Limited 1.6%CBAPB CBA Perpetual Exc Resale Listed Sec-PERLS IV 1.4%CTN Contango Microcap Limited 1.2%ILF ING Real Estate Community Living Group 1.2%RHG RHG Limited 1.2%EPX Ethane Pipeline Income Fund 1.1%AIX Australian Infrastructure Fund 1.1%SDG Sunland Group Limited 1.1%

For

per

sona

l use

onl

y

15

Market Driven facts

Financial Year to 20 April 2012

Turnover of invested equity: 6.8 times or 680%

Number of trades: 2,183

Individual stocks traded: 254

Takeovers: 37

Placements: 53

Short Sales: 24

For

per

sona

l use

onl

y

16

Clarius Group Limited (CND) –Market Driven

• Idea generated from industry contact

• Followed company for years

• Stock started to trade below NTA which is comprised of cash and receivables

• Current share price: $0.41 vs NTA $0.41. No debt.

• Free option on a recovery as downside protected by NTA

For

per

sona

l use

onl

y

17

Did you know?…..Apple Inc. – Member of G20?

• Market Capitalisation US$600bn. P/E ratio: 13x• Net Cash: $US100bn• Annualised revenue: US$184bn. Annualised profit US$52bn• One third the size of Australia’s GDP• Five times the size of BHP Billiton• Larger than Poland, Belgium and Norway’s total GDP

For

per

sona

l use

onl

y

18

Apple Inc.Key metrics relative to Country GDPs

Rank Country GDP (2011 US$bn)

Rank Country GDP (2011 US$bn)

1 United States 15,065 21 Saudi Arabia 5602 China 6,988 22 Apple Market Cap 5563 Japan 5,855 23 Poland 5324 Germany 3,629 24 Belgium 5295 France 2,808 25 Taiwan Province of China 5056 Brazil 2,518 26 Norway 4797 United Kingdom 2,481 27 Islamic Republic of Iran 4758 Italy 2,246 28 Argentina 4359 Russia 1,885 29 Austria 425

10 India 1,843 30 South Africa 42211 Canada 1,759 31 United Arab Emirates 35812 Spain 1,536 32 Denmark 34913 Australia 1,507 33 Thailand 33914 Mexico 1,185 34 Columbia 32115 Korea 1,164 35 Greece 31216 Netherlands 858 36 Venezuela 31017 Indonesia 834 37 Finland 27118 Turkey 763 38 Singapore 26619 Switzerland 666 39 Malaysia 24820 Sweden 572 40 Nigeria 247

For

per

sona

l use

onl

y

19

Looking ahead

• Further interest rate cuts

• US economic recovery to continue

• Global deleveraging cycle to continue

• Cautiously optimistic on the Australian equity market

For

per

sona

l use

onl

y

20

Looking Ahead

• Global deleveraging to continue

• Interest rate cuts positive for equity markets

• Industrial stocks cheap on a historical basis

• Expect continued merger and acquisition activity in Australia with balance sheets in good shape

Forward P/E for the Australian market

*Source: Merrill Lynch

For

per

sona

l use

onl

y

21

Summary

• Investment team continue to apply rigorous investment process that will identify opportunities and deliver performance

• Board is focused on delivering a rising stream of fully franked dividends

• Cautiously optimistic on Australian equity market

For

per

sona

l use

onl

y

22

Questions

For

per

sona

l use

onl

y

23

Additional Information

For

per

sona

l use

onl

y

24

Who is Wilson Asset Management?

• The WAM Group is the fund manager of three listed investment companies and one unlisted fund, with funds under management of approximately $340 million.

• 3 Listed Funds:− WAM Capital Ltd (ASX: WAM) − WAM Research Ltd (ASX: WAX)− WAM Active Ltd (ASX: WAA)

• Focus on listed industrial companies on the ASX

• Concentrates on growth companies predominantly in the small to mid cap area of the marketF

or p

erso

nal u

se o

nly

25

• Quick decision making

• Bottom up approach

• Staying very close to the market and investee companies

• Strong risk adjusted returns

• Significant market experience

• Closed end fund - avoiding being forced seller and buyerat inappropriate times

• Actively managed portfolio

What Wilson Asset Management delivers

For

per

sona

l use

onl

y

26

The Team

Geoff Wilson - Chairman / Portfolio Manager

Kate Thorley - CEO & Company Secretary

Chris Stott - CIO / Portfolio Manager

Matt Haupt - Equity Analyst

Martin Hickson - Analyst / Dealer

Mark Tobin - Assistant Analyst

Linda Vo - Senior Financial Accountant

Lillie Johnson - Accountant

Mary-Ann Baldock - Office Manager

For

per

sona

l use

onl

y

27

Our Business Model

Investment Focus –Growth Companies

LIC Structure Benefits

Experienced Team

Investment Process

Flexible Mandate

Tight Cost Control

Superior Long Term        Performance Record

+ +

+

=

For

per

sona

l use

onl

y

28

Our Funds

ResearchDriven

MarketDriven

WAM Active (WAA)

WAM Capital(WAM)

WAM Research(WAX)

For

per

sona

l use

onl

y

29

Superior returns from growth companies

• We buy growth companies that trade on low price to earnings multiples (P/E)

• We buy when we can identify a catalyst that will increase the valuation

• We find these opportunities are more prevalent in the small to mid cap industrials sector

For

per

sona

l use

onl

y

30

Mid to small cap sector benefits

• Small cap value has outperformed all other sectors*

• Under researched

• Access to management - ability to build strong relationships

• Life cycle of the business - ability to grow at a faster rate than larger companies

• Higher risk and higher returns

• More takeover activity

* Source – Ibbotson Associates

For

per

sona

l use

onl

y

31*Source – The New York Times

Smaller and more rewardingF

or p

erso

nal u

se o

nly

32

Listed Investment Companies are very attractive investment vehicles

• LICs have outperformed the market ^

• Studies show LICs outperform managed funds*^

• Closed pool of capital – never forced seller or buyer

• Provide consistent flow of fully franked dividends

• Lower MER compared to managed funds

• Provide opportunities – can trade at a premium/discount to assets

• Trades on the ASX which provides intra-day liquidity

^ Australian Study: Morgan Stanly Smith Barney* UK Study: Collins Stewart

LICs are superior investment vehicles

For

per

sona

l use

onl

y

33* Source: Morgan Stanley Smith Barney

LICs outperform the share market over the long term

For

per

sona

l use

onl

y

34

WAM Funds outperformance vs ASX LIC Index

*Source: Iress

For

per

sona

l use

onl

y

35

Investment objectives

The investment objectives of WAM Capital are:

• To deliver a rising stream of fully franked dividends;

• To provide capital growth; and

• To preserve capital.

For

per

sona

l use

onl

y

36

Robust investment process“Research Driven”

Identify Company

Undertake Detailed Research

Visit with Management – 800+ companies p.a.

Rank the Company (WAM’s unique rating template)

Catalyst identified or occurs

Buy or short sell shares

For

per

sona

l use

onl

y

37

Investment process“ Market Driven”

We scour the market for opportunities:

• Initial public offerings• Capital raisings• Block trades• Oversold position• Takeovers• Listed Investment Companies (LIC) discount to net tangible assets (NTA)• Stocks trading at a discount to their NTA• Earnings momentum / surprise• Short selling• Market themes and trendsF

or p

erso

nal u

se o

nly

38

External research coverage

Research Houses covering listed investment companies & WAM Capital:

- Bell Potter Securities- Morgan Stanley Smith Barney- Zenith Partners - Independent Investment Research- APAM LIC Research- Evans & Partners- JBWere- Morningstar- E.L.&C. Baillieu

The Company is on the approved product list of the Association of Independently Owned Financial Planners (AIOFP), and the Company is listed on BT SuperWrap and BT Investment Wrap platforms.

For

per

sona

l use

onl

y

39

Website – wamfunds.com.au

Subscribe for weekly emails – includes market update

Audio casts – Monthly

Media – Sky Business, Switzer, CNBC, Newspapers, Industry Magazines

Half yearly Investor Newsletters

Half yearly Results and Media Release

Attend and present at industry conferences – ASX, AIA, ASA

Investor communicationsF

or p

erso

nal u

se o

nly

DisclaimerThis presentation has been prepared for use in conjunction with a verbal presentation and should be read in that context.

Information for the graphs, charts and quoted indices contained in this presentation has been sourced from IRESS Market Technology, Credit Suisse Strategy, Morgan Stanley Smith Barney, Merrill Lynch, Ibbotson Associates, The New York Times, Collins Stewart, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd unless otherwise stated.

The information in this presentation is only intended for Australian residents.

The purpose of this presentation is to provide information only and the contents of the presentation does not purport to provide investment advice. We strongly suggest that investors consult a financial adviser prior to making any investment decision.

The presentation does not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making investment, financial or other decisions. The information is selective and maynot be complete or accurate for your particular purposes and should not be construed as a recommendation to invest in any particular investment or security, or Fund offered by Wilson Asset Management.

The information provided in the presentation is given in good faith and is believed to be accurate at the time of compilation. Neither Wilson Asset Management, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd nor its directors or employees make any representation or warranty as to the accuracy, reliability, timeliness or completeness of the information.To the extent permissible by law, Wilson Asset Management, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd and its director and employees disclaim all liability (whether arising in contract, tort, negligence or otherwise) for any error, omission, loss or damage (whether direct, indirect, consequential or otherwise).

Performance figures quoted in the report are past performance. Past performance is not an indicator of future performance. Neither Wilson Asset Management, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd nor its directors or employees guarantee or make any representation as to the performance of the Funds, the maintenance or repayment of capital, the price at which shares may trade or any particular rate of return.

40

For

per

sona

l use

onl

y