CHRY included as one of the picks in this article...
Peel Hunt: Seven big trust bargains for when the storm abates - |
Citywire had to update the above article later in the day yesterday following a call from AVI pointing out that they had increased their shareholding in CHRY to 8.4% in March...
Asset Value Investors hails Chrysalis ‘inflection point’ with 8.4% stake - |
 Asset Value Investors hails Chrysalis ’inflection point’ with 5.7% stake
Activist manager of AVI Global scoops up £27m position in Chrysalis Investments, making it the recovering growth capital fund’s largest shareholder.
Investment company activist Asset Value Investors has scooped up a £27m stake in Chrysalis Investments (CHRY), making it the largest shareholder of the growth capital fund that looks to build on a strong recovery in the past year and put the trauma of its 2022 crash behind it.
Stock exchange filings show AVI bought a 5.7% stake in Chrysalis on 27 February, two-and-a-half weeks before the investment company passed a continuation vote with the support of 97% of voting shareholders.
Most of the stake is held in AVI Global (AGT), the £1bn investment trust managed by AVI chief executive Joe Bauernfreund, which specialises in buying out-of-favour closed-end funds and holding companies.
The filings indicate just over 2% of AGT’s assets are in the late-stage private equity fund run by ex-Jupiter fund managers Richard Watts and Nick Williamson.
This puts AVI in the driving seat to ensure Chrysalis continues to prioritise shareholder returns and narrows its wide discount.
The shares have staged an impressive recovery in the last 12 months, rallying 60% on hopes of interest rate cuts and the flotation of holdings such as credit provider Klarna that could fund a £100m share buyback programme.
However, they are still less than a third of their peak in September 2021 and trail 45% below net asset value (NAV).
‘With a maturing portfolio and potentially more supportive IPO markets ahead in 2024 and 2025, we believe Chrysalis is at a key inflection point with scope for material NAV upside from what is now significantly more conservative carrying values for its key assets,’ AGT’s head of research Tom Treanor said.
‘While the new capital allocation policy ensures that the next £100m of exit proceeds will be deployed into share buybacks that will be highly accretive given the very wide prevailing discount to NAV, we look forward to continuing our constructive dialogue with the board – as the company’s largest shareholder – on what a longer-term capital allocation policy might look like.’
AVI’s purchase comes not long after managers Watts and Williamson spun off the the £887m portfolio from Jupiter, which they manage at their new firm, Chrysalis Investment Partners.
This is the second time in the past year that AVI has emerged with a big holding before a continuation vote.
In September it hiked its position in Hipgnosis Songs Fund (SONG) to 3.1% a month before two key shareholder meetings. It successfully led investor opposition to a controversial asset sale that saw the company lose the continuation vote, prompting a strategic review under a new board. |
NickGrant2.
It seems most firms have trusts they won't let you invest in or have to prove you know what your doing
Halifax allow CHRY but won't let you invest in TFIF or SMIF.
It was the first notice I had received about an existing trust that I invest in.
A tad annoying |
Yes, this is the finance industry now. We will keep going until every single person is employed in such areas of compliance |
Joey,
"Regular Investment
Please be aware that if you have a regular investment in this product set up this will no longer be able to continue, any other products in your regular investment will be unaffected. You will not be able to set up a regular investment in this product until the result of the value assessment changes."
Does this seriously mean some pen-pusher is now deciding what can and cannot be invested in, after some other pen-pusher decides what is and is not fair value?
THis is the journey towards destruction of capitalism |
Good spot, very excited about Brandtech, another IPO ready part of the portfolio and a top 4 holding of Chrysalis |
Brandtech raised more funds now valuing it at $4bn |
Positive mention at 33m on this weeks money makers podcast |
Been investing 20+ years, not received something like this but, others have said its nothing to worry about and I can't see anything untoward but, thought I would just throw it out there, just in case. |
I think it basically means that it charges more than a tracker |
They say
What’s a fair value assessment?
Price and value have been highlighted by the Financial Conduct Authority (FCA) as key factors in delivering good outcomes for customers. As part of the FCA’s Consumer Duty Regulation, financial products sold to UK retail customers are required to complete a fair value assessment, using a number of factors to assess whether the product offers value to its customers.
Off-shore funds are not required to produce a fair value assessment, however we believe it's important to still understand whether they are providing value, we have therefore worked with an independent third party called 360 Fund Insight who have carried out this analysis. A PDF is available which shows some information about the methodology which goes into assessments by 360 Fund Insight.
Find out more
Three things you could do next
Keep the investment. You can choose to hold onto your investment. Though it’s failed a fair value assessment, that doesn’t make it unsuitable for everyone
Consider other options. You could explore alternatives that fit your financial objectives
Seek advice. If you’re not sure, it’s best to talk to a qualified financial adviser
Regular Investment
Please be aware that if you have a regular investment in this product set up this will no longer be able to continue, any other products in your regular investment will be unaffected. You will not be able to set up a regular investment in this product until the result of the value assessment changes. |
What does that mean? |
Received an Email from AJ Bell
We’ve got an important update for you about an investment you hold – CHRYSALIS INVESTMENTS LTD.
Recently, this investment failed a fair value assessment, carried out by the manager of the investment itself. This means the investment may not offer you good enough value over the long term. |
I'm surprised we've not had some news on Graphcore. Seemed very close to being sold a couple of months ago so surely news must be coming |
Pensions provider Smart makes layoffs as it closes Series E round
Existing investors Fidelity International Strategic Ventures and Chrysalis Investments were involved in the £37.1m Series E extension |
Andrew Haining, Chairman of Chrysalis commented: "I would like to thank our shareholders for the overwhelming support that they have shown for the continuation of Chrysalis and their vote of confidence in the management, strategy, and vision of the Company. Chrysalis was established to offer investors access to the most innovative, disruptive and fast-growing private companies that were choosing to stay private for longer. In recent years, that trend has accelerated with fewer companies coming to the public market and growth companies largely continuing their high-growth development as private companies. The fact that 97% of those shareholders who voted did so in favour of continuing the Company firmly validates Chrysalis' investment proposition and confirms shareholder recognition of the significant opportunities and value that our exciting portfolio is set to deliver. The new management agreement and the spin-out of the team from Jupiter to a new entity has been endorsed by the board, and there was resounding support from our shareholders for the new performance fee structure with 99% of the votes in favour. We are delighted to have been able to reassure shareholders of the managers' unwavering commitment to the Company and their alignment of interest. During a period of rising interest rates and a shift from growth to value, the managers have worked hard to ensure that our investments are well funded and on a path to profitability. As a result, we now have a portfolio of increasingly profitable businesses that are performing well and which we believe are conservatively valued. We believe that the prospects for the Company are excellent, and that the opportunity remains to generate significant value as the market recovers, we begin to realise gains on the portfolio, and our plan to return capital to shareholders kicks in. With a robust capital allocation policy and governance structures in place, a continued focus on profitability, and a portfolio poised for growth, we look forward to a promising future for Chrysalis." |
Continuation vote at the AGM today and an EGM on the revised performance fee structure. Wonder if we will hear anything today. |
new CEO at Starling prior to IPO |
Interesting commentary |
I think they must mean it is 11% of CHRY but it's poorly expressed |
Well the IC think we own 11% of Klarna! You couldn't make it up. "With markets showing some life again, Klarna has become the subject of initial public offering (IPO) speculation, its chief executive saying a 2024 listing was "not impossible". The company is reportedly in talks over whether to use a dual-class share structure, so a listing is more than just on the cards. The valuation is expected to be around $20bn (£16bn). That could prove important for shareholders in one investment trust that has proved turbulent in recent history: Chrysalis Investments (CHRY), which backs later-stage private companies, had an 11 per cent position in the company at the start of this year. The fund has sunk in the face of higher rates, with shareholders taking a paper loss of 60 per cent in the past three years. The shares recently traded on a discount of more than 40 per cent to portfolio net asset value (NAV) |
Unbelievable that people on this thread are more on top of the numbers than the broker. Another good update today, should help to drive the share price a bit higher |
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