A Wealth Creation Journal

Live Portfolio Update – 2020 #10

Added 3% to Ryman Healthcare @ NZD 13.

Increased conviction in their Australia growth prospects where they literally don’t have any serious competition because a lot of the Australian retirement village operators are really property developers who are hesitant to take on age care operational risk in the scandal-prone Australia age care sector.

Ryman is hence very uniquely positioned to grow in a huge market for a long period of time. And Ryman charges 20% deferred management fee while competitors charge north of 30%.

How often do you find the lowest cost operator who is also the highest quality operator in a sector with VERY VERY long growth runways.

4 Comments

  1. WoMa92

    What do you think about earth quake risk? How big would you eventually size the position?

    • XC

      it is a risk and I am happy to take the risk. 1) there is no meaningful concentration of properties in one location such that anyone earthquake’s damage is limited 2) looking back at their track record dealing with earthquake has been pretty good – see the 2011 Christchurch quake 3) growth in Australia also further derisk the overall portfolio.

      I think it could be a 15-20% position for a 10-15% return compounded over many years. If the price corrects, happy to add to lower average cost and improve IRR.

  2. searching4value

    I like

    • XC

      thanks!

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