KFL – March 2023 Quarterly Newsletter

In the March quarter, Kingfish delivered a Gross Performance Return
of 4.1% and an Adjusted NAV return of 3.9%, versus the 3.6% return
of the S&P/NZX50 gross index.
Quarterly performance was led by respiratory equipment maker Fisher
& Paykel Healthcare (with a return of +18% in the quarter) which
upgraded its sales guidance during January. Several of Kingfish’s
other defensive growth companies also delivered solid performance
including Auckland Airport (+11%), medical products wholesaler
EBOS (+7%), and infrastructure investment company Infratil (+6%).
Detractors from performance in the quarter included wine company
Delegat (-19%), which trimmed its profit guidance slightly during
February, and a2 Milk (-15%). Cinema software company Vista (-9%)
also saw its share price fall, despite releasing a solid 2022 result
which exceeded expectations. Vista also gave guidance for a 2023
increase in revenue consistent with progress towards its medium-term
targets at its October 2022 investor day. The soft share price suggests
investors are waiting to see further evidence that under its new CEO
that the company can execute while controlling costs.
Infratil is well positioned for the future growth of Longroad
Infratil held an investor day during March. Members of Infratil’s
management team gave presentations on key thematic areas,
supported by presentations from senior management from its portfolio
companies. These included data centre business CDC, US renewable
electricity developer Longroad Energy, One NZ (formerly Vodafone
NZ), and its trans-Tasman diagnostic imaging businesses.
The tone was upbeat, with increasing confidence to deploy additional
capital into growth opportunities within the current portfolio. It was
refreshing to hear from senior management of important portfolio
companies like Longroad Energy, who are not in New Zealand often.
They are passionate experts with a wealth of experience in their
sectors. The way Infratil is structured, these key management people
usually retain equity in the companies they manage and so are well
aligned to drive success for shareholders.
Longroad is becoming an increasingly important part of the Infratil
portfolio. It has a target to grow around 3-4 times its current size
over the next four years, by developing 1.5 gigawatts per year
of renewable electricity projects in the US, primarily solar farms
and accompanying battery storage. For context, 1.5 gigawatts is
approximately enough electricity to power over a million homes.
Longroad expects to significantly benefit from the Inflation Reduction
Act in the USA, recent legislation that will deliver billions in tax credits
and subsidies to the US renewable electricity industry.
Overall, we came away from the day with confidence in Kingfish’s
Infratil position.
We fought for a better outcome in the Pushpay
takeover battle
In April 2022, Pushpay’s board had received approaches from
several parties interested in potentially acquiring the company. From
the outset, cornerstone shareholder Sixth Street and private equity firm
BGH held around 20% of the company and were clearly in the box
seat as they could effectively block any other party from doing a deal.
Unfortunately, Pushpay’s board recommended the low-ball initial
$1.34 offer by way of ‘scheme of arrangement’ in October 2022.
Generally, we remain dubious about schemes of arrangement, where
due to the 75% threshold a substantial minority can be forced to part
with a company despite rejecting an offer. The 90% takeover threshold
is there for a reason – to ensure companies are only taken private
at compelling valuations – and we would prefer to see directors not
‘lower the bar’ by readily agreeing to go down the scheme path.
At this point, they had already sought feedback from institutional
shareholders around where they viewed fair value. So, it should not
have been a surprise that many shareholders (us included) would have
not entertained an offer that low.
The board stood by its recommendation even after the Independent
Adviser came out in February with a valuation range of $1.33
to $1.53, with the $1.34 bid barely off the bottom end. This
report should have caused the board to doubt the conviction of its
recommendation; however, directors were quick to cite a number of
reasons why the range might not be appropriate. Concerningly, they
talked to the risks around the business not delivering on its goals and
management's forecasts. Presumably the board had also at some
point signed off on those forecasts, which aligned to the growth story
they had been previously presenting to investors.
Pushpay shareholders voted in March to see whether the company
would be taken private at that price. We voted against the offer,
against the directors' recommendation, because we thought it did not
sufficiently compensate shareholders. This would also pressure the
bidder to dig for a better offer. Fortunately, enough other shareholders
did the same and the scheme vote failed.
To its credit, subsequent to this, the bidder made a revised offer of
$1.42. Fisher Funds and several other key institutional investors
enabled the higher offer to be brought forward by agreeing to vote in
favour of the scheme at the new price.
Pushpay is the leader in its sector and has an appealing runway for
future growth, but several questions remain for investors. Growth
has slowed and it has changed its ‘go-to-market strategy’ repeatedly
without a satisfying explanation of why it hadn’t worked.
Overall, Pushpay still has a bright future, but it is not without risks.
Through this process, we have new doubts about whether the board
have the appetite to work hard to get the best out of management and
fight to drive value creation for shareholders over time.
For these reasons, we have agreed to accept the $1.42 offer: the
certainty of a bird in the hand.
1
Share price discount to NAV (using the net asset value per share, after expense, fees and tax, to four decimal places).
QUARTERLY NEWSLETTER
1 January 2023 – 31 March 2023
KFL NAV
$
1. 4 0
$
1. 3 2
Share Price
DISCOUNT
1
5.6
%

as at 31 March 2023
Matt Peek
Portfolio Manager
Fisher Funds Management Limited
14 April 2023
1

2
Disclaimer: The information in this newsletter 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 Kingfish Limited and its officers and directors make no representation as to its accuracy or
completeness. The newsletter is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from a financial
adviser should be taken before making an investment. To the extent that the newsletter contains data relating to the historical performance of Kingfish 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.
3 Months
3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return(2.3%)+10.3%+10.3%
Adjusted NAV Return+3.9%+9.5%+9.1%
Portfolio Performance
Gross Performance Return +4.1%+11.5%+11.5%
S&P/NZX50G Index+3.6%+6.7%+7.4%

Non-GAAP Financial Information
Kingfish 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 expenses, fees and tax,
»adjusted NAV return – the percentage change in the adjusted NAV value,
»gross performance return – the Manager’s portfolio performance in terms of stock selection,
before expenses, fees and tax, and
»total shareholder return – the return combines the share price performance, the warrant price
performance, the net value of converting any warrants into shares, and the dividends paid to
shareholders. It assumes all dividends are reinvested in the company’s dividend reinvestment
plan, and that shareholders exercise their warrants, (if they were in the money), at warrant
expiry date
All references to adjusted net asset value, adjusted NAV return, gross performance return and total
shareholder return in this newsletter are to such non-GAAP measures. The calculations applied to non-
GAAP measures are described in the Kingfish Non-GAAP Financial Information Policy. A copy of the
policy is available at http://kingfish.co.nz/about-kingfish/kingfish-policies/
LISTED COMPANIES% Holding
Auckland Intl Airport8.6%
Contact Energy4.0%
Delegat Group2.2%
EBOS Group4.0%
Fisher & Paykel Healthcare16.0%
Freightways3.4%
Infratil17.1%
Mainfreight16.9%
Meridian Energy2.0%
Port of Tauranga2.4%
Pushpay Holdings2.1%
Ryman Healthcare3.6%
Summerset8.5%
The a2 Milk Company4.7%
Vista Group International3.1%
Equity Total98.6%
New Zealand dollar cash1.4%
TOTAL100.0%
PORTFOLIO HOLDINGS SUMMARY
as at 31 March 2023
COMPANY NEWS
Dividend Paid 24 March 2023
A dividend of 2.79 cents per share was paid to Kingfish shareholders on 24 March 2023 under the quarterly distribution policy. Interest in Kingfish’s
dividend reinvestment plan (DRP) remains high with 40% of shareholders participating in the plan. Shares issued to DRP participants are at a 3%
discount to market price. If you would like to participate in the DRP, please contact our share registrar, Computershare on (09) 488 8777.
PERFORMANCE
as at 31 March 2023
Kingfish Limited
Private Bag 93502, Takapuna, Auckland 0740, New Zealand
Phone: +64 9 489 7094
Email: enquire@kingfish.co.nz | www.kingfish.co.nz
If you would like to receive future
newsletters electronically please email
us at enquire@kingfish.co.nz
SIGNIFICANT RETURNS
IMPACTING THE PORTFOLIO
DURING THE QUARTER
FISHER & PAYKEL
HEALTHCARE
+ 18
%
AUCKLAND
INTERNATIONAL
AIRPORT
+ 11
%
PUSHPAY
HOLDINGS
+9
%
THE A2 MILK
COMPANY
-15
%
DELEGAT
GROUP
- 19
%
FOREIGN TAX COMPLIANCE ACT (FATCA) AND COMMON REPORTING
STANDARD (CRS)

As a result of the New Zealand Government agreeing to participate in the exchange of information with other jurisdictions under the Foreign Tax
Compliance Act (FATCA) and Common Reporting Standard (CRS), Financial Institutions are required to undertake due diligence to determine the
account holders’ jurisdiction of tax residence. If shareholders have not previously self-certified, they will receive a Tax Residency Self-Certification form
from Computershare depending on when they first purchased their securities. Please ensure you complete and return this important document if you
have not already done so. For more information please visit the IRD website: https://www.ird.govt.nz/international-tax/exchange-of-information/
crs/registration-and-reporting or contact Computershare if you are unsure of whether you have completed your form.