Geoff Wilson answers 9 questions without notice

On the 15th of June 1999, Geoff Wilson AO's WAM Capital (ASX:WAM) was successfully listed on the ASX, having hit the maximum subscription of $20 million. Over the subsequent 25 years, Wilson's mantra of investing in undervalued growth companies with a catalyst has formed the basis of the firm's growth, along with a focus on paying fully franked dividends.

This approach and Wilson's canny ability for deal-making have been transformative, with Wilson Asset Management now responsible for over $5 billion of investor capital across eight listed investment companies and one unit trust.

Wilson knows how to grab a headline, and rarely does a week go by when the firm isn't active in the press on topics ranging from small caps to proposed changes in government legislation.

So, what don't we know about Geoff Wilson? 

To find out, I reached out to members of the Wilson Asset Management team (past and present) and asked them to submit a question for a rapid-fire interview. Who helped him get over the line with WAM Capital? Why hasn't he retreated to the south of France? Does he really own racehorses? What's the best question to ask company management?

Click on the video player or read an edited transcript below to hear Wilson's answers to these questions and more.

This interview was recorded on the 7th of November 2024

In the early days you talked about getting to $400 million and retiring to the south of France. What happened?

Well, actually funny you say that, and I know who asked that question, Matthew Kidman, because I remember in my mind it was $200 million, because I thought if we got to $200 million, one percent of $200 million is two million and we'll go and live in the south of France.

I think then maybe Matthew joined, so then there were two of us. So maybe that's where the $400 million came. I'm not sure. To me, I think it was a bit simplistic, that whole concept. So we'll put that to one side. So when we got to that size, obviously you're managing money on behalf of other people. You're trying to make a difference for them, them and yourself. So you've got to keep going.

How hard was it to raise money for the original LIC? Who was your most important early backer?

Good question. So the first listed investment company we floated was WAM Capital (ASX: WAM). And the logic about floating is that we had a trust structure, which we managed money for high net worth individuals. Then we thought, hey look, let's have a retail product and that was WAM Capital. We thought maybe we would be lucky to raise $20 million.

So the prospectus was a minimum of two and a half million dollars and up to a maximum of $20 million. The Martin-Webers, Tom Hayward and his family were great supporters putting in lots of millions of dollars here and there of the $20 million. I remember when we got to $18 million, I got a call from Dave Leeton who works for the Victor Smorgon Group, Peter Edwards in Melbourne, and Dave said, "look, we noticed you're doing a listed investment company. We are interested in it. How much have you raised?" And I said, "$18 million of the $20 million". He said, "we will put in the two million dollars". So that's a couple of the people in the early days.

I understand you like a flutter on the horses and have owned a few horses in your time, such as one of the great geldings called Yellowstone. What has been your greatest win and are you actually up on your investment?

Well, now I know that’s someone from work, because Yellowstone was a horse that Gai Waterhouse came in for lunch one day and there's a group of us, we all decided to buy an interest in Yellowstone. Unfortunately, I think it's still in the park Yellowstone, but it didn't really perform.

So with horses, in terms of what would my profit and loss be? Well, first of all, you've got to realise it's not a great investment decision owning a horse because only four percent of horse owners make money. You’re probably better off going to the pokies where the payout on pokies is fifteen percent. So I would say probably I would be optimistic if I'm neutral on horses on the investment.

And what's been your greatest win?

I had a really small interest in a horse that won at Ascot a few years ago, State Of Rest. I think it was the King's Cup. So unfortunately I was one of many shareholders and I was over there. Actually, it was called the Prince of Wales Cup, but he's the king now. So he actually presented the trophy, but unfortunately my ownership level was too low, so I didn't get to speak to him.

Tell us about the Lanserhof Longevity Clinic in Germany that you recently attended. What did you do there? How's your German and will you be back?

What did I do there? Relaxed. To me, it's like flying first class, but if you're there for a week, you're flying first class for a week. So just relax. What was my German? My German improved over the period of time I'm there. And would I go back? One hundred percent.

What is your secret to any young analyst or aspiring fund manager in managing stress, maximising longevity in a complicated market?

To me, one of the biggest challenges of anyone who professionally invests is stress. And how do you deal with that stress?

We've tried meditation. To me, physical activity, you really need some way to de-stress yourself. I know in my younger days when I was intimately involved in managing the portfolio and I had a bad day, then I'd have to go to the movies that night and that would be my way of just cleaning my brain.

And maximising longevity is really about looking at things, understanding it's a long game and understanding you're doing it for 10 to 20 years. Patience is very important. If you can have that type of time horizon, to me it helps minimise a lot of the things that might irritate you if you had more of a short term time horizon.

I really like this next question. So props to whoever wrote it. Geoff, what is the best question you think you can ask management?

When you buy shares in a company, you are backing whoever the CEO is. You're backing the management. You're become a part owner of that business, so you want them to perform on your behalf. Just like when people put money in our funds, we are performing on their behalf. So to me, I think the best question you can ask management is some way of assessing their honesty or their ability and so ask them a question that you actually know the answer to.

This was ABC learning and I remember Matthew asking Eddie Groves the question, "what's most important for your business?" And he said it was all about occupancy in terms of the childcare centres. And then I remember a couple of years down the track, Matthew asking Eddie the same question, "what's the most important profit driver for you? Or what do you look at?" And he changed the answer. That was a bit of a sign that there wasn't honesty, it was spiel. I mean, ABC Learning ended up unfortunately going under.

What would you do if you weren't in the financial markets?

I'd probably be a vet. I did a science degree at uni and my marks weren't good enough at school to get into vet science. So I applied to get into vet science at Massey University in New Zealand after I finished my science degree and I got in. But they said I had to be living in New Zealand for three years to do vet science, so I ended up never doing vet science. 

Last question for today. You obviously have employed in the past and now quite a few Matts, who's your favourite?

That's very cheeky. Who’s my favourite Matt? Is that an Irish joke? I mean, Matthew Kidman and Matt Haupt. They're my favourites.

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