Blue Sky votes to let Wilson take over

Geoff Wilson expands his empire after shareholders agreed to let the Sydney fund manager put it out of its misery.

Geoff Wilson expands his empire after shareholders agreed to let the Sydney fund manager put it out of its misery. Picture: John Feder/The Australian.

Geoff Wilson has expanded his investment empire after shareholders of the embattled Brisbane-based Blue Sky Alternative Investments agreed to let the Sydney fund manager put it out of its misery.

Shareholders in Blue Sky — which has about $213m under management, including $55m in cash — agreed to enter a new management deal with Mr Wilson’s eponymous listed fund and change its name to WAM Alternative Assets Limited at an extraordinary general meeting on Tuesday.

The takeover came more than two years after Blue Sky was targeted by a short-seller ­attack. Its share price was smashed — plummeting from $1.19 to a low of 69c — following allegations from Glaucus Research that it had exaggerated its fee-earning assets under management and gouged its customers through excessive fees.

In March last year the company declared war on itself, with its listed fund demanding its manager “immediately cease ­deployment” of its capital and warning it might wind itself up.

At the same time it also called off negotiations with Mr Wilson to take over management of the fund. But on Tuesday, 99.97 per cent of shareholders voted to hand over management to Mr Wilson and 99.88 per cent voted to change the company’s name to WAM Alternative Assets ­Limited.

Blue Sky’s annual net profit dived 23.4 per cent to $5.13m, or 2.59c a share, for the year to June 30.

Chairman Michael Cottier said the company’s investment portfolio was likely to remain under pressure as the COVID-19 pandemic continued to cloud the outlook for many businesses.

“The reduction in profit after tax was driven by a reduction in net gains on the company’s financial assets, as well as reduced dividend and trust distribution income, partly due to the impacts of COVID-19 on underlying portfolio companies,” Mr Cottier said last week when he announced the result.

“As a result of COVID-19, the future outlook for many of the existing portfolio companies is expected to remain under ­pressure.

“This is expected to temporarily translate in many cases to reduced revenues and a conservation of available cash at the portfolio company level.

“Inevitably, this is expected to delay anticipated business exits and reduce the distribution and dividend income paid out by them.”

But Mr Cottier said Blue Sky’s investment companies were in solid financial positions despite the uncertainty.

“At this stage, the directors have been advised by management that all portfolio companies which the company has investments in are in sound liquidity positions and have not required any emergency funding,” he said.