Building Maori Wealth
Inves ng lessons from a quarter century Introduc on
Ko Tainui te waka Ko Tararua te Maunga Ko Ohau te awa Ko Nga Raukawa Ki te Tonga nga iwi, Ko Nga Kikopiri te Hapu Ko Kikopiri te Marae No Auckland toku Kainga Ko Carmel Fisher ahau
My Canoe is Tainui My Mountain is Tararua My River is Ohau My Tribe is Nga Raukawa Ki te Tonga My Sub-Tribe is Nga Kikopiri My marae is Kikopiri I live in Auckland I am Carmel Fisher Creden als
• Carmel Fisher – Victoria University accoun ng degree – Four years share broker (including ’87 crash) – Seven years, Pruden al Wellington, analyst – Four years, Sovereign Takapuna, CIO – Established Fisher Funds in 1998, with $17m – “Veteran” fund manager – 29 years experience Creden als
• Fisher Funds – Established in August 1998 – More than $6 billion under management – 260,000 investors, small to large – 15 investment professionals; total team of 50 – Average return of 11%pa, over 16 years* – Top performing NZ share fund over 10 years – Top quar le KiwiSaver Growth fund
* NZ Growth Fund a er fees, before tax Tiaki whanau, Tiaki rawa their individual investment needs Our whanau prosper, if we care for our assets by effec vely inves ng and managing The Fisher Funds whanau • 260,000 New Zealanders • Large and small, young and old • Knowledgeable and naive • Risk-embracing and risk-averse • Growth focused and income focused Each requiring a unique investment approach Lessons learned
• Adhere to investment style • Understand your circle of competence • Think long-term/ have pa ence • Accept mistakes (but learn from them) • Diversifica on really does work • Do your homework • Emo on has no place in inves ng • A 51% hit rate will suffice over me • Teach a man to fish … Find your own investment style
Every individual has their own investment personality, risk appe te, inves ng meframe and approach
Husbands and wives differ Family members differ Demographic cohorts differ
One size does not fit all Find your own investment style
The Kingfisher. A wary bird. Dives deep into the water for small fish and the undergrowth for insects, possessing an ability to draw life out of unexpected places.
Fisher Funds. A careful investor. Seeks out smaller, growing companies and waits pa ently for their value to be recognised. Our STEEPP framework
• Consistent investment methodology: – Factors have equal weigh ng S Strength of the business – Avoids por olio “loves” T Track record – Assists peer review E Earnings History – Balances price and quality – Balances qualita ve and E Future Earnings growth quan ta ve analysis P People/ Management – Time-tested, proven P Price/ Valua on Stay in your circle of competence
“Risk comes from not knowing what you are doing” Warren Buffe Stay in your circle of competence
Temp ng though it is, we’ve not strayed
• Gold or silver • Venture Capital • Private Equity • Long/short • Start ups • Unfamiliar geographies (eg India)
Diversifica on does ma er
A por olio is like a flower garden, and in managing a por olio, our job is to plant a few seeds every year and weed out a few mature plants.
We have a por olio mix where we hope something will be in bloom at all mes, but we don’t expect everything to flower at once. Long term pa ence
$1.50 to $1.05 (-30%) over 4 years
Profit down 73%, opera onal issues and Aus/US s ll problema c
Expanded into Aus and US
Profits improve, further acquisi ons Profits 15% lower – restructuring costs Long term pa ence
$3.30 to $9.90 (+200%) $1.50 to $1.05 (-30%) over 4 years over 4 years
Profit down 73%, opera onal issues and Aus/US s ll problema c
Expanded into Aus and US
Profits improve, $1.50 to $1.05 (-30%) over further acquisi ons 4 years Profits 15% lower – $1.20 to $6.90 (+475%) restructuring costs over 4 years Accept mistakes
OOPS! But … 2000 Hallenstein, Sky City, GPG Fund +10%, Mkt +3% 2001 Mainfreight, Tourism Holdings Fund +19%, Mkt +4% 2002 Baycorp, Waste Management Fund +10%, Mkt +8% 2003 Baycorp Advantage Fund -7%, Mkt -4% 2004 Warehouse, Briscoes Fund +24%, Mkt +34% 2005 Turners Auc ons Fund +29%, Mkt +17% 2006 Turners Auc ons Fund +24%, Mkt +21% 2007 Pumpkin Patch, Rakon Fund +35%, Mkt +11% 2008 Pumpkin Patch, Metlifecare Fund -19%, Mkt -15% 2009 Metlifecare, Mainfreight Fund -25%, Mkt -22% 2010 Wakefield, Delegat’s Fund +37%, Mkt +26% 2011 Pumpkin Patch, Tower Fund +7%, Mkt -1% 2012 F&P Healthcare Fund +28%, Mkt +18% Do your homework
“The team gathers extensive informa on about each company, completes due diligence, company visits and detailed industry analysis. A proven and disciplined method guides their strategy. We rate them as among the best company analysts around. ” Morningstar NZ
Emo on has no place in inves ng
• Human nature means we have biases – More afraid of loss than excited by gains – Overly op mis c about our own ability – Believe others must be right – We ‘anchor’ or base decisions on past
Vola lity is the best friend of investors Inves ng – one decision at a me
• Forget home runs ... just get 51% right • Analyse poor decisions • Manage expecta ons • Revisit ini al assump ons
There is no such thing as an all-weather investment
Never stop learning
“Maori and Pacific are over-represented in the group with the lowest levels of financial literacy.” Re rement Commissioner, Aug 2014 The very best investment? • KiwiSaver • Has introduced many Kiwis to saving and inves ng • Compe ve pressure has resulted in best prac ce elements in KiwiSaver funds: – Transparency – Diversifica on – Low fees – Client service and communica on The very best investment?
Voluntary Kickstart contribu ons $1,000 (iwi, whanau)
Interest/ Employer capital growth contribu on
Member tax Personal credits contribu on
How many other investments offer so many opportuni es to grow your wealth? The very best investment? • No excuse for not joining • Only investment with 50% guaranteed return • Flexible – Change investment strategy – Change provider – Stop contribu ng • Regular inves ng means benefits from vola lity • Growth strategy best for anyone under 60 • Part of estate planning
Crea ng one successful investor at a me! Thank you .. .Ques ons?
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