Investment Policies
Investment Philosophy
The investment philosophy of the Company is summarised by the following broad principles:
- The Company seeks to buy and hold shares in companies for the medium to long term.
- The Company's preference is to invest in companies that have a proven track record of growing profitability.
- The Company will construct a diversified portfolio of investments and will invest on a case-by-case basis. The Company will usually refrain from taking a majority position in any company, unless the opportunity is compelling.
- The Company will focus on absolute returns rather than out-performing a market index.
Authorised Investments
The Manager is authorised to undertake investments on behalf of the Company in accordance with the Management Agreement.
The Manager is authorised to invest in the following on behalf of the Company:
- Equity Securities in any growth companies which are listed on a stock exchange which is a member of the World Federation of Exchanges, provided that they are not listed on a stock exchange in New Zealand or Australia.
- Unlisted Equity Securities in any growth company, provided that such company is not incorporated in New Zealand or Australia.
- Entry into stock lending arrangements relating to Equity Securities otherwise authorised in the Management Agreement.
- Underwriting or sub-underwriting commitments relating to Equity Securities otherwise authorised in the Management Agreement.
- Bank deposits or other money market securities, in any currency, the maturity of which is no greater than 30 days from the time of investment.
- Forward currency exchange contracts denominated in any currency for the management of currency exposure only. Click here for full details of the Foreign Exchange Risk Management Policy by the manager.
- Futures, warrants, options or other derivative contracts to purchase any investment or futures, warrants, options or other derivative contracts to sell any investment which is a permitted investment. Derivatives may not be used to introduce leverage into the portfolio.
- Any other type of security approved by the Company and notified to the Manager in accordance with the Management Agreement.
Borrowings
The Manager may procure a debt facility from a registered bank on behalf of the company. The amount drawn down under such facility may not exceed an amount equal to 20% of the Gross Asset Value of the Company, at the time of draw down.
The Manager shall have the authority to draw on this facility with the prior written approval of the Board.
The Manager may use such borrowings where it believes they will enhance the management and/or the return of the Portfolio.
Acquisition of Own Shares or Warrants
The Company may acquire its own shares or warrants, or provide financial assistance in connection with the purchase of its own shares or warrants, with shareholder approval by ordinary resolution and without shareholder approval if effected by pro-rata to existing holders, or in certain other circumstances permitted by the Company's constitution, the Companies Act 1993 and NZX Listing Rules. The Company may also elect to acquire its own shares for distribution through any dividend reinvestment plan.
Capital Management
The Board may from time to time authorise the Manager to buy shares or warrants in Marlin if, in the opinion of the Manager and subject to other criteria set by the Board, the value of the shares and warrant do not appropriately reflect the underlying asset value. Any decision to acquire Marlin shares or warrants will involve consideration of other investment alternatives and whether, in the opinion of the Board, any acquisition is in the best interest of the remaining shareholders.
Dividend Policy
Due to the focus of Marlin on investing in growth companies, which typically pay modest dividends (if any), the Company expects that its dividend payments to shareholders will be modest in the short to medium term.
The Directors expect that imputation credits will be attached to dividends to the extent they are available.
Under current tax rules, neither Marlin nor its shareholders will be entitled to any New Zealand tax credit for foreign imputation credits that are attached to dividends received by Marlin from the overseas companies making up the Marlin portfolio.
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