The New Zealand Growth Fund was up +1.3% in September compared to its benchmark, the S&P/NZX 50 gross index, which was up +0.05%.

Ryman (-11%) provided two positive updates during the month. Early in the month, it announced a business improvement programme. The company is recalibrating its fees to residents to more sustainable levels, commensurate with its quality offering, which will improve financial performance. It is also restructuring its team to operate more efficiently and following its decision to halt breaking ground on new villages until after it has delivered existing projects and recycled capital to reduce debt. Ryman also announced late in the month that it is appointing Naomi James as its new CEO. She has a sound track record, having assisted Refining NZ (now Channel Infrastructure) in successfully transforming from an oil refinery to a fuel import terminal. It is also pleasing to see she is appropriately incentivised to build value for shareholders. These updates reflect well on the new board and provide us with increased confidence in the future strategy and performance of the business.

Electricity company Contact Energy (-2%) announced its plans to buy hydro generator Manawa for around $2 billion, with Manawa shareholders (including Infratil in respect of its 51% stake) receiving a combination of Contact shares and cash. While the portfolio nicely complements Contact's hydro generation, it will need to execute well to deliver the anticipated portfolio benefits and cost savings to justify the price tag paid. The deal is subject to Commerce Commission approval and comes at an interesting juncture for the sector given recent media and political scrutiny. While it remains to be seen if the deal will get approval, it is also worth noting it is yet another high-value exit for Infratil (+11%), a significant position for the fund.