Newspaper icon
The latest issue of Financial Standard now available as an e-newspaper
READ NOW

Investment

Wilson Asset Management launches Founders Fund

Wilson Asset Management has launched the Founders Fund this week, based on chair Geoff Wilson's view that founder-led companies outperform over the medium to long term.

Documents on the new fund, which is backed by founder-led executives, chief executives, Wilson Asset Management staff, and high-net-worth investors aligned with its strategy, show that founder-led companies have returned 21.6% per annum over seven years, outperforming the S&P/ASX All Ordinaries Accumulation Index (9.2%).

The documents said the fund will invest in "exceptional founder-led businesses," predominantly listed on the ASX. It will target companies with strong fundamentals and a demonstrable alignment between founders/management and shareholders.

Wilson said after more than 40 years in financial markets, one universal truth stands out: "all great businesses of the world are founder led."

Wilson Asset Management portfolio manager Tobias Yao said founder-led companies have generated significant returns across its fund since 2018.

Notably, Wilson Asset Management's Microcap and Research funds have delivered over 15% per annum since inception - founder-led companies comprised 20% of holdings in these funds but generated 64% of investment portfolio returns.

"After taking a deeper dive into what's driving this performance, it became clear that unique attributes that founders bring to the table play a pivotal role - a compelling vision, long-term investment, and close engagement with shareholders," Yao said.

Wilson Asset Management also expects the anticipated rate cuts in 2025 to provide a tailwind for the IPO market, noting that founder-led IPO's have historically outperformed their non-founder led counterparts.

Documents from the fund manager show that there have been over 300 industrial IPOs between 2013 and 2020, non-founder led companies returned 2.6% per annum since listing, while founder led companies delivered 15% per annum.

To qualify as "founder-led," a company's founder must own more than 10% or $20 million of the business, hold an executive or board position, and haven't sold more than 25% of their holdings in the last year. The founder must also have aligned interests with minority shareholders.

Read more: Wilson Asset ManagementIPOFounders FundGeoff WilsonASXTobias Yao