Kingfish, a listed investment fund that targets New Zealand shares, has taken an $8 million position in Xero shares after flagging its first bet on the unprofitable accounting software company.
Its investment amounts to about 3 per cent of the portfolio of NZX-listed Kingfish, which has about $270 million in assets under management, said Sam Dickie, senior portfolio manager at Fisher Funds, which manages Kingfish.
In Kingfish's monthly update for October, released yesterday, the manager said it had been reluctant to own Xero historically but estimates the company's Australian and New Zealand businesses turned profitable in 2017 "and that Xero is on track to achieve higher group earnings this year and in the future."
Analysts have predicted that Xero will post a maiden profit in 2019.
Xero shares fell 4.3 per cent to $33.92 today, having soared about 103 per cent this year, making the company third-best performer on the S&P/NZX 50 Index behind a2 Milk and Synlait Milk. Kingfish shares fell 0.8 per cent to $1.27 and have fallen 5.9 per cent this year.
