Fisher Funds stocks

[Dolcile]

A lot more red in the BRM portfolio today 

Xero and WTC down 4% and 5% respectively.

[Dolcile]

BRM now at a 15% discount to NAV.  I'm tempted but until they show they can actually pick some winner (or at a minimum hit the benchmark) I'm not sure any discount justifies an investment ?

[Basil]

100% discount definitely would lol

[Dolcile]

lol well yes that's true

[Basil]

Please come along to the annual meeting of Barramundi next Friday and support me in this activism.

Hi Fiona,
I refer to your recent announcement regarding an extension of time for negotiations with Fisher Funds for a new management agreement.
I have some questions I will be asking you publicly at the annual meeting next week.
1. In the most recent monthly update for September it is noted that the gross performance of the fund for the 5 years was 2.1% per annum and the Benchmark Index was 9.0% per annum, an average annual underperformance of 6.9% per annum.
It is clear the present investment management team on average over the last 5 years has woefully underperformed the index so why are you even considering entering into a revised management agreement with them, rather than putting this management contract out to the market for expressions of interest and costings from other more well respected fund managers such as Milford or Harbour Asset Management ?

2. Why is the benchmark for the performance fee based on interest rates rather than the Benchmark Index ?

3. Why should shareholders be paying performance fees at all ?

4. Surely given the size of the fund a base fee of circa 0.5% - 0.75% is all that is warranted and plenty enough remuneration for a professional fund manager.

In terms of whether Robbie Urquart and his team have complied with the STEPP process and in particular whether shares represent value in the last part of that process I note I publicly called him out at the 2024 annual meeting regarding Wisetech and Xero as to why Barramundi was holding these stocks on PE's at the time of over 100 which meant that surely all the growth was already priced in. He brushed off my valuation concerns like water off a ducks back. I note both those shares have more than halved since then.

I believe Robbie has lost his way when it comes to buying growth at a reasonable price shares so I'm strongly opposed to him and his team being reemployed under a revised management agreement.  Look at it this way. If you're not catching any fish, why keep employing the same charter boat captain even at lower wages ?

In my opinion, (I am a professional investor and accountant with more than 40 years experience), you are not doing your governance job properly if you reemploy Fisher Funds going forward. It will make the board worse than the fund manager if you engage them for a further term.

[LoungeLizard]

Excellent, Basil. I wish I could make it.

I am not an investor but at the current discount to NAV I could be tempted IF the Board does what seems obvious to everyone - dump Fisher. Their own newsletter is, quarter after quarter, damning evidence of their inability to even match the benchmark. Last year they made a net loss of $43m which represented a return on NAV of -18.2%. The S&P/ASX 200 benchmark returned 9.2%. Last year was apparently the worst in it's 20 year history, and that's saying something. If that isn't evidence that a cleanup is required I don't know what is.

I am concerned though, by this statement from the Board :

"Barramundi Limited (the Company) announces that it is currently in the process of negotiating a replacement Management Agreement with Fisher Funds Management Limited (the Manager). Those negotiations are being conducted on behalf of the Company by its board of independent directors."

There is no mention that, as part of the assessment, they are negotiating with any other fund manager. The statement implies that they are only negotiating the terms of a new agreement with Fisher. They may be talking to others, but the cynic in me says that the reason they haven't announced a decision by the required date of 25th October is that if they had announced a renewal of the agreement with Fisher, then they would have faced angry shareholders at the AGM on 30th. Hence the cynic says that they are maybe stalling until after the AGM to make a decision to re-appoint Fisher.

So an additional question to ask would be - "Are the Board in consultation with other Fund Manger's to replace Fisher - and if not, why not?'

Good luck at the meeting!

[Fiordland Moose]

go get em Basil - will be rooting for you from the sidelines.

Fishers need to be dumped asap, in my view. If she's not seriously considering that, I'd suggest she is more working for them, than the shareholders to which her fiduciary duty is due.