Building Maori Wealth

Invesng lessons from a quarter century Introducon

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 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 Credenals

• Carmel Fisher – Victoria University accounng degree – Four years share broker (including ’87 crash) – Seven years, Prudenal Wellington, analyst – Four years, Sovereign Takapuna, CIO – Established Fisher Funds in 1998, with $17m – “Veteran” fund manager – 29 years experience Credenals

• 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 quarle KiwiSaver Growth fund

* NZ Growth Fund aer fees, before tax Tiaki whanau, Tiaki rawa their individual investment needs Our whanau prosper, if we care for our assets by effecvely invesng 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 paence • Accept mistakes (but learn from them) • Diversificaon really does work • Do your homework • Emoon has no place in invesng • 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 appete, invesng 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 paently for their value to be recognised. Our STEEPP framework

• Consistent investment methodology: – Factors have equal weighng S Strength of the business – Avoids porolio “loves” T Track record – Assists peer review E Earnings History – Balances price and quality – Balances qualitave and E Future Earnings growth quantave analysis P People/ Management – Time-tested, proven P Price/ Valuaon Stay in your circle of competence

“Risk comes from not knowing what you are doing” Warren Buffe Stay in your circle of competence

Tempng though it is, we’ve not strayed

• Gold or silver • Venture Capital • Private Equity • Long/short • Start ups • Unfamiliar geographies (eg India)

Diversificaon does maer

A porolio is like a flower garden, and in managing a porolio, our job is to plant a few seeds every year and weed out a few mature plants.

We have a porolio mix where we hope something will be in bloom at all mes, but we don’t expect everything to flower at once. Long term paence

$1.50 to $1.05 (-30%) over 4 years

Profit down 73%, operaonal issues and Aus/US sll problemac

Expanded into Aus and US

Profits improve, further acquisions Profits 15% lower – restructuring costs Long term paence

$3.30 to $9.90 (+200%) $1.50 to $1.05 (-30%) over 4 years over 4 years

Profit down 73%, operaonal issues and Aus/US sll problemac

Expanded into Aus and US

Profits improve, $1.50 to $1.05 (-30%) over further acquisions 4 years Profits 15% lower – $1.20 to $6.90 (+475%) restructuring costs over 4 years Accept mistakes

OOPS! But … 2000 Hallenstein, 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 Aucons Fund +29%, Mkt +17% 2006 Turners Aucons Fund +24%, Mkt +21% 2007 Pumpkin Patch, Fund +35%, Mkt +11% 2008 Pumpkin Patch, 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 informaon 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

Emoon has no place in invesng

• Human nature means we have biases – More afraid of loss than excited by gains – Overly opmisc about our own ability – Believe others must be right – We ‘anchor’ or base decisions on past

Volality is the best friend of investors Invesng – one decision at a me

• Forget home runs ... just get 51% right • Analyse poor decisions • Manage expectaons • Revisit inial assumpons

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.” Rerement Commissioner, Aug 2014 The very best investment? • KiwiSaver • Has introduced many Kiwis to saving and invesng • Compeve pressure has resulted in best pracce elements in KiwiSaver funds: – Transparency – Diversificaon – Low fees – Client service and communicaon The very best investment?

Voluntary Kickstart contribuons $1,000 (iwi, whanau)

Interest/ Employer capital growth contribuon

Member tax Personal credits contribuon

How many other investments offer so many opportunies 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 contribung • Regular invesng means benefits from volality • Growth strategy best for anyone under 60 • Part of estate planning

Creang one successful investor at a me! Thank you .. .Quesons?

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