Geoff, the fund-manager half of the Wilson (somewhat-removed) cousins who ran the franking credit refund revival circus, reportedly told his investors he had “nothing to lose” from Labor’s proposed reform.
On Monday, he made more than $1 million from Labor’s loss.
With the threat of Labor’s franking refund reform removed, bank and other franking-heavy shares soared. Among them, the listed investment companies (LICs) that are particularly popular with the self-managed super fund army.
Wilson entities own 100 per cent of Wilson Asset Management, which manages nearly $3.3 billion in a series of LICs. Wilson Asset Management annually collects 1 per cent – plus GST – of those LICs, plus a performance bonus most years. Geoff Wilson also is a considerable shareholder in the LICs.
The value of Wilson LICs jumped $108.6 million on Monday. Should they hold that rise, Wilson Asset Management will collect an extra million dollars a year, plus GST, for managing the companies.
It’s only chump change by comparison, but Mr Wilson’s direct holdings also did nicely. For example, the value of his 270,176 shares in the flagship WAM Capital Ltd jumped $28,368 on the day to $561,966.
As argued previously, rather than having “nothing to lose” from the proposed policy change, Mr Wilson probably had the country’s biggest single exposure to LICs – and thus the biggest single exposure to the impact of Labor’s policy on their share prices.
The “retiree tax” scare campaign built around the proposed franking credit refund reform, plus the self-interest of the relatively few retirees actually effected, played a major role making the Coalition the winners on Saturday, Geoff Wilson on Monday and somewhat-removed-cousin Tim Wilson when Scott Morrison announces his ministry.
Disclosure: The Pascoe family super fund is up to its ears in franking credits, including from some LICs.