The following is a selection of companies we invest in.
a2 sells 'a2'-branded fresh milk and infant milk formula internationally. The company has developed and patented a range of IP which tests whether cows produce A1-free milk. More importantly the science behind a2 the company has developed a leading, highly trusted brand in Australia and China in particular. Annual sales are now approaching $1 billion. We believe this company for their ability to recognise opportunity and having the strategic vision and operational smarts to take advantage of it.
Aeroports de Paris (ADP) owns and operates three major airports in the Paris region: Paris-Charles de Gaulle; Paris-Orly; and Paris-Le Bourget. It also has interests in airports in other regions. ADP is Europe’s second largest airport group by revenue and handles around 100 million passengers a year. Paris is the gateway to the world’s leading tourist destination and ADP’s airports handle a large majority of all French airport passenger flows.
American Tower (AMT) owns a portfolio of well over 100,000 cell towers globally, which are leased to telecommunications companies. The move to 4G networks and mobile data growth is driving increasing demand for use of AMT’s towers. AMT has a strong track record of expanding its footprint and growing its tenant base and we believe AMT can grow its earnings materially over the next five years.
Ansell designs, develops, manufacturers and markets a wide range of hand and arm protection solutions (a.k.a. gloves), clothing and condoms. It is essentially an industrial materials business that transforms natural rubber latex and synthetic latex into these value added products. The business has an interesting combination of cyclical and defensive exposures. Ansell is a leading player (#1 or #2) in all its key market segments and generates a very healthy return on invested capital.
Arena (ARF) is an Australian Real Estate Investment Trust (AREIT) that owns over 200 properties, primarily childcare centres but also a small number of medical centres. Childcare and healthcare properties have defensive characteristics, supported by long-dated leases, contracted minimum rental increases, and minimal capital requirements once developed. Demand for childcare property is continuing to grow, with the Australian government subsidising childcare and both political parties committed to improving workplace participation and productivity.
Aristocrat is a leading global provider of gaming machines and software to casinos and pubs & clubs. Aristocrat has applied its expertise in innovating and designing new games to the digital online gaming market. Digital online gaming is now a key focus for Aristocrat and presents a large opportunity for the company which should help drive revenue growth for many years.
Auckland International Airport (AIA) owns and operates New Zealand's major gateway as well as 1500 hectares of land surrounding the airport and has minority investments in Queenstown Airport and North Queensland Airports (Cairns & Mackay). AIA operates under a 'dual till' regulatory regime, meaning that the company's aeronautical operations are subject to rate of return regulation, whereas the other non-aeronautical operations are not regulated. Over half of AIA's revenue is derived from non-aeronautical operations, such as retail, parking, hotel accommodation and property rental.
Carsales owns a network of classified advertising websites in Australia. Carsales’ main website, www.carsales.com.au, is the leading automotive classifieds website in Australia. Carsales is a strong business with attractive growth prospects and interesting global options.
Charter Hall Education Trust is a large owner of childcare centre property in Australia and NZ, with around 400 properties and a development pipeline. Childcare centre properties are characterised by long leases, contracted rental increases and tenant demand that is stable through the economic cycle.
Contact Energy (CEN) is New Zealand's second largest electricity generator and provides electricity, natural gas and LPG to over half a million customers nationwide. CEN has a diverse and increasingly flexible generation portfolio consisting of hydro, geothermal and thermal power stations located throughout New Zealand.
Crown Castle (CCI) is one of the US’s largest providers of shared wireless real estate and infrastructure, with approximately 40,000 towers. CCI’s core business is leasing space on its towers to wireless carriers, such as AT&T and Verizon, and features attractive contract terms (long-term leases with contracted escalators). CCI is expected to benefit from the growing demand for mobile data and roll-out of new technologies (e.g. 3G to LTE).
Dexus (DXS) is an internally managed Australian-listed property trust consisting of a direct property portfolio valued at over A$12 billion and a similar sized third party funds management business. DXS’s portfolio is around 80% high quality Australian office property and around 20% Australian industrial property.
Domino’s Pizza is a true Australian growth stock with significant opportunities to increase its store numbers, improve sales growth in existing stores, and to expand profit margins. By customising both its pizza and service offering, Domino’s has grown from 178 stores in 2001 to over 1400 stores at December 2014.
Flughafen Zurich (FHZN) is the operator of the airport at Zurich and processes over 25 million passengers per year. Outside of Zurich, FHZN is currently involved with operating a number of airports in Latin America. Like FLU, FHZN is also a hub airport and faces a light handed form of regulation.
Flughafen Wien (FLU) operates the capital city airport in Vienna, Austria, and processes over 20 million passengers per year. FLU is a leading hub to Eastern Europe and is well positioned to take advantage of the growth from Eastern Europe and the Middle East. FLU’s regulator applies a light handed form of regulation providing scope for earnings growth over the long run.
Goodman Property Trust (GMT) is New Zealand’s second largest listed property vehicle and owns portfolio of prime industrial and office assets predominantly in Auckland, totalling over NZ$2 billion. The Highbrook Business Park in Auckland is GMT’s key asset, at around NZ$1 billion.
Kinder Morgan (KMI) is the largest energy pipeline company in North America, with around 70,000 miles of pipeline transporting around 40% of US natural gas. KMI’s infrastructure is critical for getting gas to consumers and has an outlook for significant dividend growth in the years ahead.
Meridian is New Zealand's largest gentailer, producing approximately 30% of the country's electricity in an average year. MEL's generation is sourced 100% from renewable hydro and wind resources. MEL's retail business operates under the Meridian and Powershop brands.
Nanosonics owns intellectual property and has developed applications for point of use disinfection and sterilisation technologies. These technologies have a number of core benefits compared to existing approaches and can be applied to a variety of markets. Nanosonics' advantage is based on its unique patented technologies, and the company's ability to apply these technologies to well identified market opportunities.
Norfolk Southern (NSC) is one of the two “Class 1” railroads serving the east coast of the US. NSC operates the most extensive intermodal network in the east coast and is a major transporter of coal, automotive and industrial products.
ONE Gas (OGS) is a regulated natural gas distribution business, with over 2 million customers across Kansas, Oklahoma and Texas.
PayPal is a technology-enabled provider of payment solutions, enjoying relationships with over 10 million merchants and 169 million consumers spanning the globe. The company is most well-known for its online payments technology where consumers can purchase online using their PayPal account in a way that is highly secure and doesn’t require sending credit card details over the internet.
Port of Tauranga is the dominant New Zealand port for bulk exports such as forestry and farming-related products, and its gaining share in imports especially in container freight. Its proximity to major customers and sound infrastructure are complemented by a highly-efficient labour force, making it the preferred port of call for an increasing range of shipping companies.
PWR specialises in manufacturing cooling solutions for global high end motorsport teams such as Formula One, NASCAR and Formula E. PWR is recognised as a world leader when it comes to high performance cooling and it has used its expertise to win a number of contracts to provide cooling solutions for high-priced limited run supercar manufacturers such as Aston Martin and Porsche. The company has a culture of innovation and invests a meaningful proportion of its revenues back into researching and developing new cooling solutions each year. We think this not only keeps PWR at the forefront of its existing markets but has the potential to broaden PWR’s customer base to include companies in other industries.
Ryman Healthcare is New Zealand’s pre-eminent and largest developer and operator of retirement villages. It operates a continuum of care model at over 30 villages, where residents can change accommodation requirements based on their level of care needs. Ryman has recently commenced developments in Australia, where it intends to operate the same successful model it has deployed in New Zealand.
SEEK is the largest global online employment marketplace. Operating across Australia, New Zealand, South East Asia, China, Brazil, Mexico, Bangladesh and Africa, SEEK's employment marketplaces are exposed to approximately 2.6 billion people & more than 20% of global GDP.
Stride Property (SPG) owns and manages a diversified portfolio of commercial (office, industrial and retail) properties predominantly located in the main urban areas in the North Island of New Zealand. SPG also provides property management services to third party property funds totalling over $1 billion.
Tilt Renewables (TLT) engages in the development, ownership, and operation of wind electricity generation facilities. Its current projects in Australia and New Zealand include Dundonnell Wind Farm; New South Wales Project; Palmer Wind Farm; Rye Park Wind Farm; Salt Creek Wind Farm; Waddi Wind and Solar Farm; Kaiwera Downs; Mahinerangi Wind Farm; and Waverley Wind Farm. The company is headquartered in Tauranga, New Zealand.
Transurban (TCL) owns a portfolio of long-dated concessions to operate urban toll roads in Australia and the USA, with its Australian operations representing the core of its earnings. TCL is Australia’s dominant toll road owner and operator, owning concessions to the majority of the operational toll roads in Melbourne, Sydney and Brisbane. TCL has a strong track record of successfully partnering with governments, and is expected to benefit from many attractive investment opportunities over the coming decades given its existing network of integral urban roads.
Vista Group International is an innovative and profitable company providing sophisticated software to cinema exhibitors. It has around 40% worldwide market share with clients in over 70 countries. Its integrated software systems allows cinema exhibitors to run wide ranging functions such as ticketing, food and beverage sales and re-ordering, staff and film scheduling, loyalty schemes, digital signage as well as external customer interfaces like websites and mobile apps. It also has a fast growing analytics business.
Westpac is Australia's oldest bank and corporation. It operates a leading bank franchise in both Australia and New Zealand and has a strong presence in all spheres of retail and business banking. Westpac has a formidable stable of brands supporting its top tier position in both deposit gathering and lending.
Z Energy recently acquired Chevron New Zealand (Caltex) and now has around a 50% share of New Zealand’s transport fuel market. The combined group will have over 300 petrol stations, 160 truck stops and 14 storage terminals. Z Energy will keep the Caltex brand and operations separate to its own but is expected to achieve significant synergies from the acquisition over time.
Portfolio holdings summary as at 31 August 2019
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