MLN – August 2019 monthly update

1
Monthly Update
August 2019
MLN NAV
$
0.99
SHARE PRICE
$
0.95
DISCOUNT
1
4.4
%
as at 31 July 2019
A word from the Manager
Global equity markets continued to grind higher in July,
supported by accommodative central banks and a better
than expected start to the corporate earnings season in
the US. The US Federal Reserve lowered interest rates for
the first time in 11 years in July, while the European Central
Bank also gave strong hints that an easing package is on
the way. Against this backdrop the US S&P 500 reached
new all-time highs and closed up 1.3% for the month (and
19% year to date).
Earnings reporting season in the US is now well underway
and is a key focus for us. Reporting season allows us to check
in with our portfolio companies and see how their businesses
are tracking. We have witnessed very strong results from
a handful of our portfolio companies, which contributed
significantly to the performance of the fund in July.
Marlin Global had gross performance of 3.7% in July, while
our global benchmark rose 1.4%. The adjusted NAV return
for the month was 3.7%.
Portfolio Company Developments
Alphabet, Google’s parent company, was one of the top
performers in the portfolio after announcing results that
showed rapid growth in its digital advertising business.
The company delivered 22% revenue growth in the second
quarter, which was driven by rapid growth in mobile
advertising and YouTube. Alphabet’s share price gained over
13% during the month.
Edwards Lifesciences reported 18% growth in sales of its
trans-catheter aortic heart valves, leading to a 15% jump in
its share price in July. Edwards manufactures heart valves
that are implanted via minimally invasive surgery, reducing
the need for open-heart surgery and lengthy hospital
stays. Recent clinical studies showing the superiority of
this technology to traditional heart valves has improved
awareness and confidence in the technology.
UPS, the parcel delivery giant, also delivered stronger than
expected results and saw its share price gain 16% in July.
UPS is benefiting from growth in demand for ‘next day air’
delivery, driven by ecommerce volumes and faster delivery
expectations. Next day delivery allows UPS to charge
premium prices, which combined with strong volume
growth allowed UPS to confirm it is on track to grow profits
by +10% for the full year.
Tyler Technologies reported 39% growth in software
subscription revenue in the second quarter, having
recently booked the two largest subscription orders in
the company’s history. Tyler provides software to local
authorities in the US and its applications help local
governments manage a range of functions including
finance, property appraisal and taxes, HR, payroll, court
and prison management, and emergency response. This is
a significantly underserved end-market, with the majority of
small local authorities well behind the curve on technology
adoption. Tyler’s shares gained 8% during the month.
EssilorLuxottica, the owner of Ray-Bans sunglasses and
OPSM, also reported solid results. The company continues
to see an acceleration in growth in its core lenses business,
and management spoke with increased confidence on the
integration of the Essilor and Luxottica businesses and the
associated cost and revenue synergies. EssilorLuxottica
also announced the acquisition of a GrandVision, a
leading European eyewear retailer, which further cements
it position as the dominant player in global eyewear.
EssilorLuxottica’s share price gained 7% for the month.
The only two major detractors from performance for the
month were Fresenius Medical Care and Electronic Arts.
Electronic Arts (EA) also reported better than expected
results in July, supported by strength in its FIFA soccer
video game franchise. EA also continues to show strong
growth in digital game downloads, which are more
profitable for EA than sales of physical DVD games in
store. Despite the strong results, EA’s share price slumped
9% in July due to separate data that showed its much-
lauded battle royale title Apex Legends may not have
as much traction as first thought. It is too early to tell
how successful Apex Legends will ultimately be, but we
are encouraged by the progress EA is making in its core
franchises including FIFA.
1
Share Price Discount to NAV (using NAV to four decimal places)

2
Ashley Gardyne
Senior Portfolio Manager
Fisher Funds Management Limited
Kidney dialysis clinic operator, Fresenius Medical Care,
underperformed on mixed earnings results. The core business
was strong, with treatment growth in its core North American
dialysis business continuing to accelerate. However, outside
the core business, the company unexpectedly guided to lower
profits from a government trial for a new dialysis patient care
model that Fresenius is participating in. Fresenius’s share price
ended the month 9% lower.
While recent results from our portfolio companies have
generally been strong, we try not to get overly fixated on the
quarterly results of our portfolio companies. These results
allow us to check how each business is tracking against
our investment thesis, and can highlight if any issues are
Sector Split
as at 31 July 2019
Key Details
as at 31 July 2019
FUND TYPE
Listed Investment Company
INVESTS IN
Growing international companies
LISTING DATE
1 October 2007
FINANCIAL YEAR END
30 June
TYPICAL PORTFOLIO
SIZE
25-35 stocks
INVESTMENT CRITERIA
Long-term growth
PERFORMANCE
OBJECTIVE
Long-term growth of capital and
dividends
TAX STATUS
Portfolio Investment Entity (PIE)
MANAGER
Fisher Funds Management
Limited
MANAGEMENT
FEE RATE
1.25% of gross asset value
(reduced by 0.10% for every
1% of underperformance
relative to the change in the
NZ 90 Day Bank Bill Index
with a floor of 0.75%)
PERFORMANCE
FEE HURDLE
Changes in the NZ 90 Day Bank
Bill Index + 5%
PERFORMANCE FEE
10% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$0.96
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
147m
MARKET
CAPITALISATION
$139m
GEARING
None (maximum permitted 20%
of gross asset value)
26
%
CONSUMER
DISCRETIONARY
9
%
FINANCIALS
18
%
INFORMATION
TECHNOLOGY
20
%
COMMUNICATION
SERVICES
Geographical Split
as at 31 July 2019
16
%
WEST EUROPE
74
%
NORTH AMERICA
9
%
INDUSTRIALS
10
%

ASIA
The Marlin portfolio also holds cash.
18
%

HEALTHCARE
brewing that require more detailed research. Overall we
are comfortable with how the businesses in the portfolio
are performing. They continue to grow steadily, despite
the trade-war driven volatility we are currently witnessing in
equity markets in August.

July’s Biggest Movers in local currency terms
Typically the Marlin portfolio will be invested 90% or more in equities.
UNITED PARCEL SERVICE
+16
%
EDWARDS
LIFESCIENCES
+15
%
ALPHABET INC.
+13
%
FRESENIUS MEDICAL
-9
%
5 Largest Portfolio Positions as at 31 July 2019
ALPHABET
10
%
FACEBOOK
6
%
ALIBABA GROUP
6
%
MASTERCARD
5
%
PAYPAL
5
%
The remaining portfolio is made up of another 20 stocks and cash.
Nov
2007
Nov
2008
Nov
2009
Nov
2010
Nov
2011
Nov
2012
Nov
2014
Nov
2013
Share Price/Total Shareholder Return
Share PriceTotal Shareholder Return
Nov
2015
$
1.00
$
0.50
$
0.00
$
1.50
Nov
2016
Nov
2017
$
2.50
$
2.00
Nov
2018
Total Shareholder Return to 31 July 2019
Performance to 31 July 2019
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+5.6%+10.5%+17.3%+17.3%+13.3%
Adjusted NAV Return+3.7%+3.0%+9.9%+15.0%+11.6%
Portfolio Performance
Gross Performance Return +3.7%+3.5%+12.9%+18.9%+15.4%
Benchmark Index^+1.4%+0.4%+1.6%+11.5%+13.1%
3
^Benchmark index: World Small Cap Gross Index until 30 September 2015 & S&P Large Mid Cap/S&P Small Cap Index (50% hedged to NZD) from 1 October 2015
Non-GAAP Financial Information
Marlin uses non-GAAP measures, including adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return. The rationale for using such non-GAAP measures is as follows:
»adjusted net asset value – the underlying value of the investment portfolio adjusted for capital allocation decisions after fees and tax,
»adjusted NAV return – the net return to an investor after fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency hedging before fees and tax, and
»total shareholder return – the return to an investor who reinvests their dividends, and if in the money, exercises their warrants at warrant maturity date for additional shares.
All references to adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return in this monthly update are to such non-GAAP measures. The calculations applied to non-GAAP
measures are described in the Marlin Non-GAAP Financial Information Policy. A copy of the policy is available at http://marlin.co.nz/about-marlin/marlin-policies/
ELECTRONIC ARTS
-9
%

Disclaimer: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by
necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Marlin Global Limited and its officers and directors make no representation as to its accuracy
or completeness. The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from an
authorised financial adviser should be taken before making an investment. To the extent that the update contains data relating to the historical performance of Marlin Global Limited or its portfolio
companies, please note that fund performance can and will vary and that future results may have no correlation with results historically achieved.
Marlin Global Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 484 0365 | Fax: +64 9 489 7139
Email: enquire@marlin.co.nz | www.marlin.co.nz
4
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777 | Fax: +64 9 488 8787
Email: enquiry@computershare.co.nz | www.computershare.com/nz
About
Marlin Global
Marlin is an investment company
listed on the New Zealand Stock
Exchange. The company gives
shareholders an opportunity to
invest in a diversified portfolio of
between 25 and 35 quality growing
international companies (excluding
New Zealand and Australia)
through a single, professionally
managed investment. The aim
of Marlin is to offer investors
competitive returns through capital
growth and dividends.
Capital Management Strategies
Regular Dividends
»Quarterly distribution policy introduced in
August 2010
»Under this policy, 2% of average NAV is targeted
to be paid to shareholders quarterly
»Dividends paid by Marlin may include dividends
received, interest income, investment gains
and/or return of capital
»Shareholders who prefer to have increased
capital rather than a regular income stream have
the opportunity to participate in the company’s
dividend reinvestment plan (DRP)
»Shares issued to DRP participants are at a 3%
discount to market price
»Marlin became a portfolio investment entity on
1 October 2007. As a result, dividends paid to
New Zealand tax resident shareholders have not
been subject to further tax
Share Buyback Programme
»Marlin has a buyback programme in place allowing
it (if it elects to do so) to acquire up to 5.9m of its
shares on market in the year to 31 October 2019
»Shares bought back by the company are held as
treasury stock
» Shares held as treasury stock are available to be
re-issued for the dividend reinvestment plan
Warrants
»Warrants put Marlin in a better position to grow
further, operate efficiently and pursue other capital
structure initiatives as appropriate
»A warrant is the right, not the obligation, to
purchase an ordinary share in Marlin at a fixed price
on a fixed date
»There are currently no warrants on issue

Management
Marlin’s portfolio is managed
by Fisher Funds Management
Limited. Ashley Gardyne (Senior
Portfolio Manager), Chris
Waters and Harry Smith (Senior
Investment Analysts) have prime
responsibility for managing
the Marlin portfolio. Together
they have significant combined
experience and are very capable
of researching and investing in
the quality global companies that
Marlin targets. Fisher Funds is
based in Takapuna, Auckland.

Board
The Manager has authority
delegated to it from the
Board to invest according to
the Management Agreement
and other written policies.
The Board of Marlin
comprises independent
directors Alistair Ryan (Chair),
Carol Campbell, and Andy
Coupe; and non-independent
director Carmel Fisher.