There’s no keener contributor to the media campaign against Labor’s proposed capital gains tax reform than Rich Lister funds manager Geoff Wilson. Michael Pascoe wonders why.
Fund manager Geoff Wilson was as responsible as anyone for Labor losing the 2019 election, leading the wildly successful campaign against Bill Shorten’s attempt to reform dividend franking. The campaign and result were certainly in Wilson’s best interests – franked dividends have helped to elevate him to the AFR’s 2026 Rich List with an estimated worth of $891m.
But why Wilson is getting back on the political campaign horse to fight Labor’s capital gains tax changes may not be as immediately obvious. Well, beyond the obvious tendency of rich people to want to pay as little tax as possible.
On the surface, Labor’s CGT and negative gearing reforms advantage Wilson’s funds management business and the 130,000 people who pay him to keep the dividends coming, but as the AFR reported ($), the key to Wilson’s success is marketing.
Wilson’s high wealth – he collects race horses and seems to compete with Gina Rinehart to own the most oceanfront properties in Sunshine Beach comes from his ownership of Wilson Asset Management, managing $6B that is mostly locked into nine listed investment companies (LICs) that pay the manager 1 to 1.25% a year and sometimes a bit more.
The lure of LICs
The selling point for those LICs, aside from Wilson’s relentless marketing, is the LICs’ grossed-up dividends – the extra pre-tax value franking adds to company dividends, especially valuable when the shareholder pays little or no tax.
For example, the April monthly reports of Wilson’s two biggest LICs, WAM Leaders (WLE) and WAM Capital (WAM), both worth $1.8B, claimed annualised interim dividend yields of 7.2 and 9% respectively. Nice.
Gross up those dividends with franking credits, and the pre-tax yields are 10.3 and 11.3% for Australians. Also very nice.
For shares held in a superfund in “pension phase” that pays no tax, the yields are very, very nice indeed – they’re tax-free.
Franking credits were supposed to be about removing “double taxation” – shareholders get a credit for the tax paid by the company. The inherent fallacy in this is the idea that the shareholders are the company. They are not. The limited companies that populate the stock exchange are totally separate legal entities, which shareholders are very glad about when a company is sued or goes broke owing millions.
Nonetheless, the industry that has grown up to exploit franking has resulted in no or little tax being paid on a company’s profits when the shareholder pays no or little tax, as is the case in superfunds. Instead, the tax office pays the shareholder the tax the company had paid. The SMSF Army commanded by General Wilson rules.
The Wilson LIC model concentrates on maintaining those regular dividends, smoothing payouts via retained profits and capital management.
And all that is untouched by Labor’s changes. If anything, investing in equities, LICs or otherwise, has been made more attractive by comparison with Australia’s other darling, established residential real estate. Heck, you can even continue to negatively gear your equity investments if you like.
CGT changes
Come the new CGT rules, there could, in theory, be a little more tax paid by individuals buying Wilson LICs should they subsequently sell them at a profit with a capital gain beyond inflation.
But that’s not really the Wilson thing. Using 10 years as a fair measure of performance (and five years for one that has only been around that long), shares in only two of the eight Wilson LICs are worth more today than they were a decade ago and by only by a fraction of the overall market’s gain. The ninth LIC is only a year old and is up 5 per cent.
So, on the track record, Wilson investors have little to fear from the proposed CGT change.
For Wilson Asset Management, though, running another “looking after investors” political campaign is a wonderful marketing opportunity.
Click on the Wilson websites, and you’ll be invited to “protect Australian aspiration and sign the petition against the government’s changes to capital gains tax”. There’s the obligatory AFR opinion piece ($) and ready quotes for the usual media suspects, plus Geoff Wilson’s enthusiasm for Twitter, as it used to be called.
Marketing the Wilson brand counts because the way funds under management are grown – and with them those locked-in fees – when their share price isn’t rising is by starting new LICs, issuing extra shares and dividend reinvestment options. That’s how Geoff Wilson can get even richer.
As the AFR reported ($)in its 2026 Rich List edition:
“In building Wilson Asset Management, he targeted wealthy individuals rather than superannuation funds and other institutions, and put them in closed-end listed investment companies (rather than pooled managed funds). He then marketed the hell out of the listed vehicles. Wilson started big investor roadshows two decades ago, booking out hotel rooms. Initially, only about seven or eight investors would turn up.
“These days, he attracts crowds of 500 at his events in Brisbane and Sydney. He is even taking his investment team and their stock tips on regional roadshows to Newcastle, Gold Coast, Toowoomba and Noosa.
“He also uses the media relentlessly, sending his stock pickers to Toastmasters to hone presenting and interviewing skills. His corporate affairs team monitors media mentions, social media posts, website traffic and click-through rates on their own email campaigns closely.”
After the 2019 success attacking franking credits reform, a CGT campaign now is a marketing gift for Wilson, publicity he doesn’t have to buy. There’s no end of aspiration – he told the AFR he wants to work into his 80s.