BRM - June 2025 Quarter Newsletter

In a volatile environment for share markets, Barramundi rebounded
strongly in the June Quarter (“Q2”), with gross performance
+11.6%, and an adjusted NAV return of +10.8%, both ahead of the
ASX200 benchmark index which rose +8.7%.
Q2 started poorly with share markets sinking rapidly in early April as
the US announced a raft of tariff proposals for many of their trading
partners. At the stroke of a pen, these proposals were put on hold
and in some cases, reduced. This in turn buoyed share markets and
after falling sharply, from its lows in April the ASX200 index rose
+17% through to the end of June.
Heightened share price volatility driven by global rather than
company specific events, while stressful, works in both directions
(i.e. shares can rebound as quickly as they fall). In a continuation
of a theme from our Q1 quarterly update this again highlights the
importance for investors of being measured in responding to share
price volatility.
During Q2 we sought to selectively take advantage of this volatility in
the changes we made to our portfolio. As in Q1, we typically added
to positions in companies that are performing well in the context of
what they can control. Where execution by management teams has
been sub-par, we have held off adding to positions. In the case of
James Hardie, we exited entirely.
With the benefit of hindsight, it is easy to lament not being more
aggressive in the portfolio changes that were made. That said,
markets moved fast, changes in US policy and announcements were
also erratic. Overall, we are pleased with the steps we took during
Q2 and with our portfolio’s performance.
Taking advantage of market volatility &
adding to companies that are performing
well
Pinnacle (+36% in the period we owned it) was the key new
addition to our portfolio during the market turmoil in April.
Pinnacle provides a number of fund managers with best-in-class
services including seed funding (investing in the funds to help get
them started). They also help with fund raising (distribution), and
provide administrative services too including helping with regulatory
documentation, prospectuses etc. In doing this, Pinnacle frees up
the fund managers to focus on what they do best – research and
investing.
In return Pinnacle get a share of the ownership of these fund
managers, and they charge a fee for the services they provide.
Pinnacle is led by founder-CEO Ian Macoun. He is supported by a
strong, long tenured management team. Pinnacle has a long track
record of helping its affiliates grow their businesses. Growth in funds
under management across Pinnacle’s network of fund managers has
been predominately organic (20%+ annualised since 2008). This
has been driven by strong investment returns, inflows and Pinnacle’s
support of new affiliates with seed funding. Some of the new
managers in Pinnacle’s stable manage $10 billion or more of funds
under management.
Pinnacle’s share price fell sharply due to market volatility and
provided us with a fleeting chance to add it to our portfolio. It then
rebounded strongly as equity markets recovered, to levels where
valuation upside looked stretched to us. So, we sold our position
within a few weeks.
It is unusual for us to buy and sell shares in a position so rapidly. We
would have been happy remaining invested for a number of years.
However, the share price rallied sharply and more strongly than we
anticipated so we elected to exit the position. Should valuation look
more appealing in the future, we could well see Pinnacle back in the
portfolio.
As covered in our Q1 update we had added to the likes of Car
Group (+19% in Q2) and SEEK (+12% in Q2) in the March Quarter
and continued buying shares in Q2. Share prices of both companies
rose strongly in the period, demonstrating the strength of their
businesses in volatile market conditions.
SEEK in particular, had a pleasing investor day in May, highlighting
the tremendous progress they are making in developing new
products and in embracing artificial intelligence. Despite a stagnant
employment market, SEEK’s technology investments in recent
years gives it the ability to effectively increase the price or ‘yield’
of employment adverts. This reduces the earnings cyclicality of the
business. This theme came through strongly at its investor day.
Pleasingly, some of Q1’s ‘problem children’
rebounded strongly as key concerns
abated
We wrote about insurance remediation services provider Johns
Lyng (+48% in Q2) (“JLG”) in our Q1 update given its poor financial
performance in the last year. We did not add to the position in
Q1 because of the investment thesis drift related to their poor
financial performance. We didn’t think the investment case was
broken. Rather we wanted to see evidence of improved execution
in New South Wales (“NSW”). Anecdotally their outlook in NSW
has improved. In addition, bad weather in NSW and a cyclone in
Queensland also lifted insurance claims, improving JLG’s earnings
prospects and supporting the share price.
Potentially seeing the latent valuation upside that exists for Johns
Lyng, a private equity suitor then entered into takeover discussions
with the company. This drove a large part of the share price move
in Q2. The Board of Directors has provided the private equity firm
with exclusive access to due diligence which should be completed
in July at which point a takeover offer may or may not be tabled for
the company. The price of the potential takeover offer has not been
disclosed to the market. We are monitoring these events closely.
WiseTech (+34% in Q2), another laggard during Q1, made good
strides in refreshing its Board and addressing its governance
concerns. The company’s business performance remains sound. In
May, WiseTech announced a US$2.1bn acquisition of US software
business e2open. Although it is still early days, we are encouraged by
the acquisition of e2open. WiseTech seems to have opportunistically
acquired the company at an attractive price. The complementary
nature of its software products broadens WiseTech’s reach across
global logistics participants, helps it accelerate growth and puts
further distance between it and its competition.
1
¹ Share price discount to NAV (using the net asset value per share, after expenses, fees and tax, to four decimal places).
1 April 2025 – 30 June 2025
$
0.6 9
Share Price
as at 30 June 2025
QUARTERLY NEWSLETTER
BRM NAVDISCOUNT
1
$
0.7 12.3
%

We did not add to our positions where
poor share price performance was
company specific
Share prices of many companies fell during the tariff related turmoil.
We were selective in which shares we bought, or, despite the share
price weakness, that we sold during this turmoil. A key differentiator
between the buying and/or selling decision, came down to how the
company itself was performing.
James Hardie (-9% in Q2) is a good case in point. The company
announced the acquisition of a large US building products company
that is a leader in composite (including recycled PVC) decking for
homes. Although the business is complementary, this was poorly
received by the market. James Hardie management is deemed to
be paying too much and has structured the deal in a way that looks
to destroy value for James Hardie shareholders. Management also
deprived shareholders of the right to vote on the transaction.
Through this transaction, we have lost faith in the James Hardie
Board and management team. Evaluating the ‘people’ running the
companies we invest in is a key part of our investment process. In this
PERFORMANCE
as at 30 June 2025
3 Months
3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+6.7%+5.2%+10.3%
Adjusted NAV Return +10.8%+13.5%+11.0%
Portfolio Performance
Gross Performance Return+11.6%+16.3%+13.5%
Benchmark Index¹+8.7%+13.8%+12.3%
1
Benchmark Index: S&P/ASX 200 Index (hedged 70% to NZD)
Non-GAAP Financial Information
Barramundi 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 and
currency hedging 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 Barramundi Non-GAAP Financial Information Policy. A copy of the
policy is available at
barramundi.co.nz/about-barramundi/barramundi-policies.
Company% Holdings
Ansell1.6%
ANZ Banking Group2.4%
AUB Group4.9%
Audinate Group1.6%
Brambles5.7%
CAR Group5.2%
Cochlear Limited3.4%
Commonwealth Bank1.9%
Credit Corp3.3%
CSL7.2%
Domino's Pizza1.5%
Fineos Corporation Holdings3.0%
Johns Lyng Group3.3%
Maas Group Holdings Limited2.6%
Macquarie Group5.3%
National Australia Bank3.1%
NEXTDC3.6%
oOh! Media3.0%
PWR Holdings2.2%
REA Group1.9%
ResMed4.9%
SEEK6.4%
Wise Tech Global7.0%
Xero Limited5.7%
Equity Total90.7%
Australian cash7.1%
New Zealand cash2.0%
Total cash9.1%
Forward foreign exchange contracts 0.2%
Total 100.0%
PORTFOLIO HOLDINGS
SUMMARY
as at 30 June 2025
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 Barramundi 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 Barramundi 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.
Barramundi Limited
Private Bag 93 502, Takapuna, Auckland 0740, New Zealand
Phone: +64 9 489 7074
Email: enquire@barramundi.co.nz | www.barramundi.co.nz
If you would like to receive future
newsletters electronically please email
us at enquire@barramundi.co.nz
SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO DURING THE
QUARTER IN AUSTRALIAN DOLLARS
JOHNS LYNG
+48
%
WISETECH
+34
%
NEXTDC
+28
%
CBA
+22
%
DOMINO’S
-25
%
instance, despite the fall in the share price, we have therefore sold
our position.
Domino’s (-25% in Q2), which we wrote about in Q1, sits
somewhere in between the buy and sell decision. We didn’t buy
or sell shares despite the continued slide in its share price during
Q2. There were no material financial updates in Q2. While some of
the management team was replaced during the period, again, in
evaluating the people and their track record, we have held off buying
shares until we see evidence of an improvement in performance
from the refreshed team. With its scale advantages and strong brand
presence in a number of countries, we think there is good upside
to be had if management performs well. But with a management
refresh underway, pragmatically this is likely to take some time. We
continue to engage with the company and monitor its performance.
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
14 July 2025