Fund manager seeks new fields

Carmel Fisher

Carmel Fisher's Fisher Funds is doing a u-turn on the investment policy of its $150 million New Zealand Growth Fund.

The fund-manager is best known as a specialist in small and medium-sized listed stocks and its growth fund has also steered clear of unlisted companies - unless they plan to list within three months.

But from July 1, the fund will be able to put up to 30 per cent of its money into unlisted companies and top 10 stocks will also be allowed.

Investors have been told to cash in their units before then if they do not agree with the changes.

The moves come against the backdrop of a 6.5 per cent decline in the sharemarket since late February - which has made life harder for small and medium-sized stocks.

Not everyone is happy. One investor said: "Fisher has done better than the index by staying away from the big public companies. Why would they want to reverse that approach?"

But Fisher Funds' chief investment officer, Warren Couillault, said the changes did not dramatically alter the nature of the fund.

"On the contrary. There's 10 big-cap stocks we could potentially invest in and an infinite number of tiny companies that are not listed, so really it's saying we've got much more focus or opportunity at that smaller end of the market.

"We just want that flexibility. If something really good comes along at either end, why not be able to invest in it?"

But the investor, who did not wish to be named, said up to 30 per cent of the fund in unlisted firms was too much because "if there's a run on funds, how would they be able to sell such securities in a short time?"

Managing director Carmel Fisher said the fund was unlikely to get close to 30 per cent invested in unlisted securities in the next few years.

If, over five years, unlisted firms became an increasing part of the portfolio, the fund manager would consider a separate fund for them.

The fund was only likely to invest in one unlisted company at a time. Investments would be regularly and independently valued.