REG - Chrysalis Investment - Annual Report and Audited Financial Statements
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RNS Number : 2026M Chrysalis Investments Limited 19 December 2025
The information contained in this announcement is restricted and is not for
publication, release or distribution in the United States of America, any
member state of the European Economic Area (other than to professional
investors in Belgium, Denmark, the Republic of Ireland, Luxembourg, the
Netherlands, Norway and Sweden), Canada, Australia, Japan or the Republic of
South Africa.
19 December 2025
Chrysalis Investments Limited ("Chrysalis" or the "Company")
Annual Results
The Company today announces its results for the year ended 30 September 2025.
The Company's audited annual results are copied below. The results will be
available on the Company's website in due course.
Financial summary
30 September 2025 30 September 2024 % change
NAV per share 171.65p 141.26p + 21.5%
Share price 121.20p 93.30p + 29.9%
Total net assets £875m £840m + 4.1%
Performance Headlines
At 30 September 2025, the NAV stood at 171.65 pence per share, marking a 21.5%
increase over the year. This growth was primarily driven by Starling,
reflecting the strong performance of its core UK banking operations and its
innovative SaaS platform, Engine by Starling ("Engine"). Another significant
contributor was wefox, where recapitalisation efforts by the Investment
Adviser have successfully turned around its earnings performance and enhanced
the Company's carrying value. In contrast, Brandtech and Deep Instinct were
notable detractors during the year, tempering overall gains. The share buyback
delivered an accretion of around 9 pence per share, contributing approximately
7 percentage points to the rise in NAV per share.
The Company's share price increased by nearly 30% during the year, ending at a
29% discount to NAV per share; since year end, the discount has widened and
currently stands at approximately 37%.
In line with the Company's commitment to refrain from new investments ahead of
the 2026 AGM, portfolio activity during the year was focused on unlocking
value from existing holdings and supporting the remaining portfolio. A total
of £130.7 million was realised, driven by the sale of Featurespace to Visa
for £80.0 million (with the potential to rise to £89.2 million upon full
escrow release) and the sale of InfoSum to WPP for £49.8 million. Alongside
these realisations, £31.8 million was deployed across three follow-on
investments: £16.6 million into wefox to support its recapitalisation, £4.7
million into Deep Instinct, which remains loss-making, and £8.2 million into
secondary Klarna stock. A small, de minimis investment was also made into
InfoSum ahead of its sale.
In the year, £85.9 million was deployed into the Company's share buyback
programme, funded by the successful disposals of Featurespace and InfoSum. In
addition, the Company's liquidity potential was further enhanced by the
successful listing of Klarna on the NYSE in September 2025. The Company's
Klarna shares are subject to a six-month lock-up period, with trading
eligibility commencing in March 2026.
The Company closed the year with £166 million in net liquidity (after
deducting the £70 million term loan) of which £118 million was held in
listed assets and £48m in net cash. Post year end, a further £16 million has
been deployed into the share buyback, taking the total amount returned to
shareholders under the programme to £102 million.
Andrew Haining, Chair, commented:
"In 2025, the Company continued to build on the momentum established in 2024
through the actions of the Investment Adviser, execution of the Capital
Allocation Policy and with a background of more favourable market conditions.
Liquidity has improved significantly. Within the portfolio, Starling continued
to impress with global traction for its SaaS platform, Engine, and the
remediation work undertaken to position its UK banking operations for a return
to meaningful growth. This and other positive developments in the portfolio
position the Company well as we look ahead to 2026.
Despite this progress, the discount to NAV against which the Company's shares
trade remains material and the Board recognizes the need to do more to remedy
this situation. Consequently, as covered in a separate announcement, the Board
is proposing significant changes to the Company's Investment Policy which if
adopted, should see the discount narrow."
Richard Watts and Nick Williamson (Managing Partners of the Investment
Adviser), commented:
"Operationally, we have been focused on maximising value through board-level
engagement, particularly at Starling, Smart Pension and wefox, where we now
hold a seat on all boards.
Starling made meaningful progress over the year, improving its risk control
framework, launching new products and leveraging AI to enhance both customer
experience and operational efficiency. Its SaaS platform - Engine - also
announced a significant contract with Tangerine Bank in Canada post year end,
which we view as highly material in establishing Engine's presence in the
market for migrating existing books for banking customers. Smart Pension's
technology platform, Keystone, and its position as a consolidator in the UK
pension market, underpin its growth prospects with tailwinds expected from the
government's Pension Schemes Bill. At wefox, the transition to an asset-light
MGA model and strategic market exits have driven a significant, positive
EBITDA swing.
We remain optimistic for 2026, with a focus on the most influential assets
with a view to maximising value for shareholders."
-ENDS-
For further information, please contact:
Media +44 (0) 7921 881 800
Montfort Communications: chrysalis@montfort.london
Charlotte McMullen / Imogen Saunders
Investment Adviser +44 (0) 20 7871 5343
Chrysalis Investment Partners LLP:
James Simpson
AIFM +44 (0) 20 7397 5450
G10 Capital Limited:
Maria Baldwin
Deutsche Numis: +44 (0) 20 7260 1000
Nathan Brown / Matt Goss
Panmure Liberum: +44 (0) 20 3100 2222
Chris Clarke / Darren Vickers
Barclays Bank PLC: +44 (0) 20 7623 2323
Dion Di Miceli / Stuart Muress / James Atkinson
IQEQ Fund Services (Guernsey) Limited: +44 (0) 1481 231 852
Aimee Gontier / Elaine Smeja
LEI: 213800F9SQ753JQHSW24
A copy of this announcement will be available on the Company's website at
https://www.chrysalisinvestments.co.uk
(https://www.chrysalisinvestments.co.uk)
The information contained in this announcement regarding the Company's
investments has been provided by the relevant underlying portfolio company and
has not been independently verified by the Company. The information contained
herein is unaudited.
This announcement is for information purposes only and is not an offer to
invest. All investments are subject to risk. Past performance is no guarantee
of future returns. Prospective investors are advised to seek expert legal,
financial, tax and other professional advice before making any investment
decision. The value of investments may fluctuate. Results achieved in the past
are no guarantee of future results. Neither the content of the Company's
website, nor the content on any website accessible from hyperlinks on its
website for any other website, is incorporated into, or forms part of, this
announcement nor, unless previously published by means of a recognised
information service, should any such content be relied upon in reaching a
decision as to whether or not to acquire, continue to hold, or dispose of,
securities in the Company.
The Company is an alternative investment fund ("AIF") for the purposes of the
AIFM Directive and as such is required to have an investment manager which is
duly authorised to undertake the role of an alternative investment fund
manager ("AIFM"). G10 Capital Limited is the AIFM to the Company. Chrysalis
Investment Partners LLP is the investment adviser to G10 Capital Limited.
Chrysalis Investment Partners LLP (FRN: 1009684) is an Appointed
Representative of G10 Capital (FRN: 648953) Limited, which is authorised and
regulated by the Financial Conduct Authority.
Performance Headlines
171.65p
- NAV per share increase of 30.39p or 21.5%
The increase is driven by the upward valuation of the portfolio and NAV per
share accretion from the share buyback.
121.20p
- Share price increase of 27.90p or 29.9%
The share price closed at a 29% discount to NAV, narrowing from 34% on 30
September 2024.
£131 million
- Proceeds from realisations
Including realisations from Featurespace (£80.0 million), InfoSum (£49.8
million) and Graphcore (£1.1 million of deferred proceeds). A further £9.2
million is expected from the sale of Featurespace on release of escrow.
£86 million
- Repurchase of shares
The amount of capital returned to shareholders during the period through the
share buyback mechanism.
£236 million
- Total liquidity
The Company ended the period with a substantially improved level of liquidity
available to support the existing portfolio and continue the share buyback,
including gross cash of £118.1 million (net cash of £48.1 million).
86%
- Percentage of the portfolio that is profitable
86% of the portfolio was profitable on an underlying basis in the twelve
months to 30 September 2025, compared to 76% in the prior year.
Chairman's Statement
The Company, I am pleased to say, continued to build on the growth it had
begun to generate in 2024. The year ending 30 September 2025, saw underlying
NAV per share rise by over 20%, helping to generate a similar rise in the
share price. The Board believes that the approach the Investment Adviser has
been adopting, and the policies which the Company instated with the Capital
Allocation Policy ("CAP") in March 2024, have helped share price performance,
alongside generally favourable market conditions.
Progress on a number of fronts
The Investment Adviser's report examines the portfolio in detail, but I would
like to highlight progress on the following areas:
Liquidity
Liquidity continues to improve and has exceeded the expectations established
at the time of setting the CAP in March 2024. During the year, realisation
proceeds from the successful disposal of Featurespace, net of a £9.2 million
retention, were received. Separately, the Company's holding in Klarna is now
listed on the New York Stock Exchange ("NYSE").
Whilst the Klarna holding is subject to a post-IPO lock up, its implied value
represented 13.2% of NAV as at the year-end NAV and 18.7% of the period end
share price. In line with the Company's commitment to return the first £100m
of proceeds to shareholders, the Featurespace proceeds received to date have
already been returned.
wefox
The leading role the Investment Adviser took in the capital restructuring of
wefox has led to a significant increase in the carrying value of the
investment. With a change in management and the strategic direction of the
company, the future appears more positive for what was an underperforming
investment.
Starling
The continuing development of Starling, including its Software as a Service
("SaaS") banking technology platform, Engine, is very exciting. Engine
continues to gain momentum, most recently through a ten-year contract with
Tangerine Bank, a wholly owned subsidiary of the Bank of Nova Scotia, one of
Canada's largest banks. This contract validates the product globally by
expanding Engine's client base from Europe and Australia to include North
America. The Company's holding in Starling therefore represents not only an
investment in a retail and commercial bank in the UK with potential for high
growth, but also exposure to a scalable, cloud-based global banking technology
platform that is increasingly regarded as world leading.
Capital Allocation
The Board and the Investment Adviser have now operated under the current CAP
since the March 2024 AGM. In that period, the Company has returned £102.2
million, satisfying the first £100m target and beginning the return of at
least 25% of net realised gains on asset sales.
The impact of the CAP has been positive. Over the twelve months since its
introduction, the average share price discount has narrowed from approximately
50% to approximately 33%. Over the same period, the Company's shares have
outperformed the FTSE 250 (excluding Investment Trusts) Index by 24%. While
this progress is encouraging, the Board recognises that further steps are
required to ensure the share price more fully reflects the underlying value of
the Company's investments.
Adoption of a new Investment Policy
As communicated in the CAP update in May, as a result of the ongoing discount
to NAV, a group of shareholders, led by the Company's largest shareholder,
expressed a desire for the Company to commit to making no new investments. In
addition, while recognising the value within the existing portfolio and its
potential to grow further over time, these shareholders expressed a preference
for an accelerated programme of asset disposals, with capital returned to
shareholders as realisations occur.
The Board respected this position but wished to determine how widely this view
was shared by other shareholders. Consequently, the Board asked Rothschild
& Co to bring forward their review of the operation of the CAP due to take
place in 2026, by one year. This consultation involved discussions with
shareholders representing approximately 60% of the Company and concluded in
October, with further engagement taking place during November and December.
The findings, implications and subsequent proposals for the way forward
derived from those discussions are set out in a separate statement being
released concurrently with these financial statements.
In summary, the Board believes that, whilst there are differences in views
between some shareholders on how best to realise the potential within
Chrysalis, the views of a majority of shareholders can be accommodated through
amendments to the existing Investment Policy. The overriding objective of the
amended Investment Policy would be to implement an orderly realisation
programme for the portfolio assets in a way that is designed to maximise
returns of capital to shareholders over a three-year time horizon, while
avoiding forced or value-destructive disposals. The amended Investment Policy
would not allow for new investments to be made.
The Board will be seeking support from shareholders for this approach at an
EGM to be held early in 2026. These changes, if supported by shareholders,
represent a significant adjustment to the objectives of Chrysalis and the
Board will be working closely with the Investment Adviser to develop a modus
operandi for the Company that is reflective of these new objectives. It is
expected that a circular will be posted to shareholders in January 2026,
containing further details of these changes, the proposed resolutions and the
notice convening an EGM.
Board Rotation and Composition
Anne Ewing has expressed a wish to step down from the Board as of 31 December
2025 and the Board has acceded to her request.
Anne, aside from being an experienced and highly regarded non-executive
director, has had a long and successful career in international banking. The
Board and the Company have benefited immensely from the skills gleaned from
her executive roles at a senior level. Her input to the oversight of the
Company's holdings in regulated financial and banking companies has been
significant and had an impact on how the Board and the Investment Adviser have
approached certain matters since 2018. I would like to extend the Board's
thanks to Anne for her time and her significant contribution as a director of
the Company.
The Board has considered a number of potential replacements for Anne and is in
the final stages of selecting a candidate who I believe will bring significant
relevant experience and knowledge to the Board. The Board already has a matrix
of skills that can oversee the delivery of a revised investment policy and the
appointment we intend to make will reinforce that capacity.
It remains for me to thank the Investment Adviser, the AIFM and all associated
advisers to the Company for their contributions over the year. Chrysalis will
evolve further during 2026, with the central objective of the Board being to
deliver returns to our shareholders.
I would also like to thank those shareholders who have taken the time to share
their views with the Board directly, as well as through the Rothschild &
Co consultation. The Company has a valuable portfolio of investments in
growing companies. I am confident that constructive interaction between the
Board, the Investment Adviser and shareholders will continue to ensure we
create the best environment to extract and maximise that value.
Andrew Haining
Chairman
Portfolio Statement
Principal Opening invested/ Fair value Closing % of
place of Cost value (returned) movements value net
Company business (£'000) (£'000) (£'000) (£'000) (£'000) assets
Starling Group Holdings Limited UK 118,349 254,441 - 152,142 406,583 46.5
Smart Pension Limited UK 108,570 123,434 - - 123,434 14.1
Klarna Group PLC UK 79,712 120,562 8,225 (13,531) 115,256 13.2
wefox Holding AG Switzerland 103,108 36,217 16,570 38,713 91,500 10.5
The Brandtech Group LLC USA 46,440 80,230 - (43,418) 36,812 4.2
Deep Instinct Limited Israel 66,794 41,809 4,569 (19,649) 26,729 3.1
Secret Escapes Holding Limited UK 28,009 25,328 - (9,614) 15,714 1.8
Wise PLC UK 655 2,015 - 1,090 3,105 0.4
Sorted Holdings Limited UK 316 316 - - 316 0.0
Cognitive Logic Inc. USA - 29,928 (47,229) 17,301 - -
Featurespace Limited(2) UK - 81,391 (89,218) 7,827 - -
Graphcore Limited UK - - (167) 167 - -
Rowanmoor Group Limited UK 13,363 - - - - -
Tactus Holdings Limited UK 42,129 - - - - -
Total investments 607,445 795,671 (107,250) 131,028 819,449 93.7
Cash and cash equivalents 118,118 13.5
Other net liabilities (62,996) (7.2)
Total net assets 874,571 100.0
Investment Adviser's Report
Market Context
At the time of the FY24 report and financial statements, the Investment
Adviser felt that the market backdrop was improving; market conditions did
remain positive across the year, with the tech-heavy NASDAQ rising 23.0%.
Inflation was less aggressive than the 2021-23 period but remains above target
in the US. As a result, US 10-year yields continued to bubble around the low
four percent level, averaging approximately 4.3% across the period.
Despite inflation running "hotter" than the Fed's target, concerns over the
level of real interest rates, some signs of cooling in the US economy, the
recent sharp falls in inflation and monetary policy lag effects have all
raised hopes that the Fed might continue to ease its target rate. This has
likely helped US markets to perform well over the period.
In the UK, the equity story was more mixed, with the FTSE All Share up 12.2% -
driven by the FTSE100 - but the more domestically focused FTSE250 only up by
3.0%, partly driven by UK fiscal uncertainty and lack of investor appetite in
invest in UK exposure.
Despite this UK uncertainty, the Company delivered strong NAV growth over the
period - approximately 21.5% - and the generally conducive global equity
backdrop, and likely the share buyback undertaken during the period, assisted
the Company's share price to rise nearly 30% over the financial year.
While there were bouts of volatility, often tied to President Trump's "trade
wars", the market environment was sufficient to allow a continued recovery in
the IPO market in the US; European issuance remained subdued, with the UK
seeing very minimal activity.
IPO wobbles continued into the third quarter - a period that saw Klarna's IPO
delayed due to market volatility - but conditions settled down sufficiently
for it to list in September.
Evidence of the improvement in market sentiment came in the form of further
realisations from the portfolio. Following on from the sale of Graphcore to
Softbank Group Corp in the prior year, Featurespace was sold to Visa in
December 2024 and then InfoSum to WPP plc in April 2025.
Performance
Performance was strong over 2025, with NAV per share rising approximately
21.5%, with 1H25 seeing a c7.8% increase and 2H25 rising by c12.7%.
Across the year, key drivers of NAV per share were:
i. Starling, which added around 28p, driven by the performance of
the core UK bank as well as the first-time inclusion of a valuation for Engine
by Starling ("Engine"), the company's SaaS technology provider;
ii. wefox also contributed approximately 6p, following the work
undertaken by the Investment Adviser to recapitalise it, which led to a
turnaround in company performance as well as enhancing Chrysalis' position in
the capital structure; and
iii. Around 9p per share was added via accretion from the Company's share
buyback mechanism, which saw c85.4 million shares bought back at an average
share price of 101 pence.
The key detractors from performance were:
i. Brandtech, which saw its valuation written down due to the
subdued nature of the market - evidenced by the varied performance of listed
peers - as well as a slower adoption of AI by the industry than the Investment
Adviser had expected; and
ii. Deep Instinct, which experienced some difficulty converting its new
business pipeline.
Activity
In line with the Company's commitment not to make new investments before the
2026 AGM, portfolio activity focused on follow-on investments and
realisations.
Over the period, £130.7 million was realised (and a further £2.6 million was
recovered); the main components were:
i. The sale of Featurespace to Visa which completed in December
2024; cash proceeds of £80.0 million were received in the year. The expected
gross proceeds amounted to a money multiple return of 3.0 times; and
ii. The sale of InfoSum to WPP plc which completed in April 2025,
generating cash proceeds of £49.8 million.
On the other side, approximately £31.8 million was invested, with the
principal elements being:
i. £16.6 million invested into wefox in December 2024, to aid in
the restructuring of the company; Chrysalis benefited from a preferential
capital enhancement available to those investors that participated.
ii. £8.2 million was invested into Klarna in November 2024, as part of
a secondary process; and
iii. £4.7 million was invested into Deep Instinct over the year to
support the company, which is still loss making.
A further de minimis investment was made into InfoSum to support the company
prior to its sale to WPP.
In line with the Company's Capital Allocation Policy ("CAP"), approximately
£86 million of liquidity was used to buy back shares over the year, at an
average share price of 101 pence per share, as part of the commitment to
return up to £100 million to shareholders, and thereafter at least 25% of net
realised gains on asset sales. As of 17 December 2025, the share buyback
programme had cumulatively returned approximately £102 million.
The Company funded the share buyback programme via sales of some of its
smaller positions rather than by selling any of its more mature, later-stage
assets, leaving the key positions of Starling, Smart Pension and Klarna intact
at year end.
As a result of this activity, the Company has broadly held its net cash
position flat over the year, with net realisations covering the share buyback
and fees.
In September, Klarna listed on the NYSE at a price of $40 per share. While the
share price decreased by year end, in line with the market, and has weakened
further post period end, the position in Klarna still represents significant
liquidity potential - approximately £115 million, at year end - albeit the
Company is currently subject to a customary six-month lock up period following
the IPO, which ends on 10 March 2026.
During the year, the Company drew down the £70 million term loan that was put
in place at the end of the prior year, resulting in a gross cash position of
£118.1 million at period end.
Post year end, £10 million of the debt facility was repaid, reflecting the
strong liquidity position of the Company, reducing the loan balance
outstanding to £60 million.
Outlook
The Investment Adviser remains focused on maximising the value of the
companies remaining in the portfolio.
As described in the FY24 Annual Report, significant work was undertaken across
most of the portfolio in the prior year to enhance value in processes either
led, or supported, by the Investment Adviser. Key among them in that year
were:
i. The reorganisation undertaken at Smart, which led to a
significantly more efficient structure, new senior hires and materially better
profitability - underlying EBITDA improved from a loss of £42.5 million in
2023 to a profit of £6.8 million in 2024; and
ii. The significant restructuring undertaken at wefox, which saw the
company divest its insurance carrier (the part of the business that assumed
the insurance risk), cut costs, appoint new executives and reduce the number
of geographies it operates in. The upshot of this programme was also a
substantial improvement in profits.
As a result of this work, 2025 has seen a shift in focus from restructuring
towards operational delivery. While good progress has been made in this
regard, the Investment Adviser believes the full upside from the changes
effected in 2024 have yet to be realised.
The Investment Adviser remains heavily involved in shaping the strategic
direction of the Company's portfolio and holds board positions across all
private assets, serving as a Board Director for most of the unlisted portfolio
and as an observer at Brandtech. Building on prior observer roles, the
Investment Adviser has strengthened its influence by securing board seats at
Starling and Deep Instinct, in addition to joining the board of wefox in the
prior year. This expanded responsibility provides the Investment Adviser with
a more direct say in guiding the Company's assets and driving long-term value.
Particularly for the Company's larger positions, the Investment Adviser also
meets C-suite executives regularly to ensure a good understanding of their
thoughts and the condition of the respective underlying business to inform its
views on progress towards strategic goals.
Given the CAP and subsequent disposals to fund it, diversification has
inevitably reduced. In addition, due to the strong performance of key assets -
particularly Starling - concentration has also risen. With approximately 74%
of NAV in three assets and 85% in four, the outlook for the Company is likely
to depend on the successful execution of the strategies of those assets.
With that in mind, the Investment Adviser is heavily focused on helping to
drive success in the Company's most influential assets, which in reality means
Starling and Smart, given the listed nature of Klarna and the Company's
proportionately small shareholding in it. These companies share similarities
in that they are both successfully monetising the technology they built to
provide their own services by selling it to third parties. The Investment
Adviser has seen first-hand the power of this model during the development of
Wise and has been an active advocate in these instances as a value driver.
Starling has continued to make meaningful progress over the year. While not
all developments are yet externally visible, the underlying trajectory is
encouraging. Adjusted profitability for the year to March 2025 was down
marginally compared to the prior year - £280 million versus £301 million -
but the Investment Adviser notes that major operational improvements have been
made behind the scenes. These include recent hires bedding into their new
roles; the successful launch of new products, such as Easy Saver and Scam
Intelligence; a brand refresh undertaken; and the recent resumption of
marketing activity. Collectively, these initiatives support the more
optimistic tone adopted by the Chairman in relation to Starling's recent
regulatory situation.
In addition, there has also been significant positive news, most pertinently
that of Engine winning a major ten-year deal with Tangerine Bank in Canada.
Tangerine is a multi-award-winning digital bank with two million customers,
assets of C$40 billion and is a wholly owned subsidiary of Bank of Nova Scotia
with assets of approximately C$1.4 trillion.
While the Investment Adviser believes there is significant value to be accrued
from driving performance at Starling's UK bank, Engine offers another avenue
for growth and potentially significant valuation enhancement, given the strong
sales multiples that high growth SaaS businesses can attract.
Engine also provides diversification for Starling. Not only does it face a
substantial total addressable market, but it also allows the bank to move into
new territories in a capital light way, while broadening out the group's
revenue split away from net interest income, towards fees.
Smart also offers a significant growth opportunity with both the Smart Pension
Master Trust ("SPMT") and its technology offering.
SPMT is likely to reach approximately £9 billion in AuM by the end of the
calendar year and has significant "in-built" growth, in the shape of annual
contributions of over £1 billion by pensioners. Given the operational gearing
Smart's technology platform - Keystone - provides, this growth should prove
highly lucrative.
As one of the market's leading consolidators, Smart stands to benefit from the
Pension Schemes Bill currently being debated by the UK government and which
aims to set a minimum scale for multi-employer defined contribution trusts.
The Investment Adviser believes that this is likely to lead to a spike in
M&A in the sector, which potentially has already begun with media outlets
reporting NatWest is looking to sell its Cushon Master Trust.
Given Smart's track record of successful M&A, this market environment
could prove to be very helpful at gaining scale more quickly than a pure
organic route.
In combination, Keystone is seeing strong interest from other industry
participants that are keen to replace aging technology with a digitally
native, modern software solution. In a similar way to Engine, if Keystone can
successfully build a sizeable recurring revenue base, this could supplement
the valuation attached to SPMT.
While the share price weakness of Klarna post IPO is disappointing - US
fintech has been generally weak post year end - the Investment Adviser is
optimistic over its future financial performance.
Having delivered 26% like-for-like revenue growth year-on-year over 3Q25 and
guided to 36%-38% over 4Q25, Klarna announced in December it achieved GMV
growth of 45% in November (vs guidance of 28%-31% for 4Q25). The Investment
Adviser believes this acceleration has been driven by the numerous, large
relationships that Klarna has signed recently, and sees reason to believe top
line growth will continue to be robust in the coming quarters.
As per its IPO prospectus, Klarna expects its transaction margin to increase
as markets scale and cohorts mature. If transaction margins in the US - which
were 23% over 2024 - begin to pull towards its existing European markets - 57%
in 2024 - then the outlook for profitability in the medium-term should be
strong.
As a result, the Investment Adviser believes Klarna is well placed to grow
materially in the coming years.
Conclusion
With another strong year in terms of NAV progression and realisations under
its belt, the Investment Adviser is optimistic that 2026 should see further
progression and is particularly encouraged by the positioning of the key units
in the Company's portfolio.
The Company's two key unlisted assets - Starling and Smart - have both worked
through major operational upgrades over the last two years, which the
Investment Adviser believes makes their market positions considerably
stronger; the key now is execution.
The Investment Adviser looks forward to working with the management teams of
the portfolio companies to help maximise their future values in the coming
year.
Starling Group Holdings Limited ("Starling")
Starling Bank continues to perform strongly, delivering a resilient financial
performance over the year while resolving some important legacy matters. This
was reflected in the increase in Starling's carrying value driven by both its
strong financial performance and the improvement in trading multiples among
its listed peers. The valuation now also incorporates a distinct assessment of
the Engine business.
In its latest annual results (for the year ended 31 March 2025), Starling
posted revenue of £714 million, up from £682 million in the prior year.
Customer deposits increased to £12.1 billion (vs £11.0 billion at 31 March
2024) and total open accounts reached 4.6 million (vs 4.2 million at 31 March
2024), reflecting continued customer acquisition. Notably, this was Starling's
fourth consecutive year of profitability. Statutory profit before tax came in
at £223.4 million, lower than the previous year's £301.1 million due to a
number of exceptional costs, but underlying profit before tax was £280.6
million. Surplus capital increased by approximately 40% to over £400m which
provides strong capital coverage and strategic optionality.
Over the course of 2025, the bank was particularly focussed on addressing some
historic weaknesses in its risk management processes. In September 2024, the
Financial Conduct Authority (FCA) completed an investigation into Starling's
anti-money laundering and financial crime systems and controls framework, as
referenced in last year's annual report. The FCA found that these controls
failed to keep pace with the growth of the business between December 2019 and
November 2023; Starling accepted those findings and paid a fine of £29.0m.
Significant remediation work, including investment into skills and resource,
has been undertaken over the year. While this has had an impact on growth and
profitability, the Investment Adviser believes it now leaves Starling well
placed to deliver further growth and accelerate customer acquisition through
increased levels of marketing.
To this end, it has been encouraging to see new product launches recently,
such as a Cash ISA and Scam Intelligence, a brand refresh and the resumption
of marketing activity.
A central part of Starling's global strategy is its 'Engine by Starling'
software platform and the Investment Adviser is excited about the potential of
Engine given its current momentum. Engine is Starling's cloud-native
Software-as-a-Service ("SaaS") core banking offering, which leverages the same
technology that underpins Starling's own operations.
Engine provides a "full stack" of applications needed to run a bank, with the
core banking and ledger piece accounting for only 10% of the typical customer
economics.
Over the past year, Engine has made significant progress. Its first external
clients, Salt Bank in Romania and AMP Bank in Australia, successfully launched
new digital banks on the Engine platform. These partnerships contributed £8.7
million to Starling's fee income in FY2025 (up from £2.3 million in FY2024)
and were both delivered on-budget and on-time.
The progress of Salt Bank has been particularly encouraging. Salt Bank, which
launched in April 2024 as Romania's first fully digital bank, amassed over
500,000 customers in its first year of operation and is now one of the top 10
banks in Romania by customer count and is aiming to close 2025 with over
700,000 customers.
In Australia, AMP Bank used Engine to build a new mobile-first banking
platform focused on under-served small businesses and everyday retail clients.
The project was delivered in just 12 months, and AMP's new digital bank went
live to customers in 1Q 2025. At launch it offered fully digital onboarding
for personal and business accounts, along with innovative features like
numberless debit cards and in-app financial management tools.
Shortly after the year end, Starling announced a marquee contract with
Tangerine Bank in Canada; this is Engine's first contract win in North
America.
Tangerine (a leading Canadian digital bank with over 2 million customers) has
signed a 10-year agreement to upgrade its core banking system using Engine's
cloud-native platform. Under the deal, Tangerine will migrate its digital
banking operations onto Engine - enabling a next-generation banking experience
for Tangerine's customers and a step-change in the bank's technology
capabilities. This is Engine's largest contract win to date and represents a
significant milestone for the group.
To deliver on the Tangerine project and a growing pipeline, Starling has
announced plans to hire over 100 additional staff. Starling has now also
established offices in New York and Toronto to support growth in the region.
Throughout the period, Starling has been developing AI technologies to enhance
its banking platform and customer experience. Internally, Starling has
embedded AI into its operations to improve efficiency and service quality. For
example, Starling now uses AI to automatically summarise customer service
calls and assist its support agents, a workflow that saves an estimated 8,000
hours per month and has helped cut average call response times significantly.
AI tools have also reduced the need to escalate chats to specialist teams by
around 50%, freeing up staff to focus on complex issues.
On the customer-facing side, Starling launched a first-of-its-kind AI feature
in its banking app in June 2025. Branded "Spending Intelligence," this tool
uses generative AI (built on Google's Gemini large language model) to let
users query their own spending data in plain English. Starling became the
first UK bank to enable natural-language, in-app financial insights and
customers can ask questions such as "How much did I spend on groceries last
month?" and receive instant analysis and visual breakdowns of their
transactions. This feature which is part of Starling's mission to help people
be "good with money," shows how AI can deliver personalised budgeting insights
at scale.
Starling views AI as central to future innovation and the Investment Adviser
believes this could be a key differentiator in the future. Starling is looking
to infuse AI across its platform and recently announced plans to hire 400
additional engineers to accelerate AI development across the organisation.
In October 2025, Starling unveiled Scam Intelligence - an AI tool to help
protect customers from fraudulent transactions, which should help to combat
Authorised Push Payment fraud. Given that Starling's technology stack can
provide a single view of a customer, it is uniquely positioned to develop and
launch some of these features, especially versus traditional high-street
banks.
In summary, the Investment Adviser is excited about the future growth
potential of Starling and the implications for its valuation. While revenue
and profit performance was relatively subdued in the year ended 31 March 2025,
significant progress has been made in building a strong foundation for future
growth. The company now has a much-improved risk control framework in place
and has made a number of important hires across various departments. Engine is
gaining real momentum and innovative product features are being rolled out
which will help differentiate the core bank's customer proposition and help
accelerate customer acquisition.
Smart Pension Limited ("Smart Pension" or "Smart")
Smart Pension's financial performance has improved significantly over the last
few years. Despite this, there was a modest decrease in the assessed equity
valuation of Smart, driven by a reassessment of the valuation model, albeit
the Company's carrying value was unchanged, reflecting Smart's capital
structure.
Recurring revenues grew from £23.2 million in FY2022 to £44.8 million in
FY2024, implying a compound annual growth rate of 38.9%. Growth in recurring
revenue has been driven by rising membership, higher assets under management
and selective M&A. This trajectory has continued over the course of 2025.
At the same time, the company has delivered a material improvement in
profitability.
Following a strategic review and cost-cutting exercise initiated in the first
half of 2024, which streamlined operations and significantly reduced the cost
base, Smart delivered its first full year of profitability in 2024 (an EBITDA
loss of £42.5 million in 2023 was transformed into £6.8 million of EBITDA in
2024). The Investment Adviser expects Smart to continue delivering sustained
profit growth over the medium-term with Smart now benefitting from improved
operating leverage.
The Smart Pension Master Trust ("SPMT") continues to grow strongly, and it is
now the third largest auto enrolment Master Trust in the UK. Customer numbers
have increased by roughly 50% between 2022 and 2024 (to over 1.5 million
members), and SPMT is expected to close 2025 with over 2 million members
through a combination of new employer clients and the strategic acquisition of
smaller schemes. Ongoing contributions from this growing member base, combined
with investment returns, have driven steady growth in Assets under Management
("AuM"). The Investment Adviser expects SPMT's AuM to reach nearly £9 billion
by the end of 2025, up from approximately £4 billion in January 2024.
Smart has been an active participant in sector M&A, and the external
policy environment is likely to accelerate industry consolidation. Recent UK
government proposals, highlighted in the Chancellor's Mansion House speech and
currently being debated in parliament - Pension Schemes Bill - call for
workplace pension providers, especially master trusts, to reach much greater
scale. Regulators have signalled that "fewer, bigger, better-run" schemes are
needed to improve member outcomes. These proposals will require UK master
trusts to demonstrate a pathway to managing £25 billion AuM by 2030, with a
less aggressive transition pathway for growth companies, likely requiring £10
billion AuM by 2030.
While these reforms are still being finalised, the clear direction of travel
is toward encouraging smaller pension schemes to merge into larger ones. This
trend plays to Smart Pension's strengths as one of the market's leading
consolidators.
With a strong track record of M&A and a cloud-native technology platform,
Smart is well-placed to absorb smaller schemes and re-platform them. In an
industry likely to be dominated by a handful of larger trusts, the scarcity
value of platforms like Smart Pension's is likely to increase. Smart is also
one of the few master trusts that has a technology capability.
From the existing client and membership base, along with projected market
movements, an extrapolation of current trends suggests that SPMT can grow
organically to more than £20 billion of assets over the next five years. With
continued M&A, and the inherent growth of those acquisitions, the
Investment Adviser believes Smart can reach the minimum threshold that has
been set out in recent UK government proposals. From a financial perspective,
this kind of scale would enable Smart to deliver a strong margin profile on a
business that could deliver multiple times the current level of revenue.
Alongside SPMT, Smart Pension continues to monetise its Keystone platform and
the Investment Adviser remains optimistic about its future.
Keystone is the company's proprietary cloud-native retirement technology
system that underpins both SPMT and is offered as a "platform-as-a-service" to
third parties. It is already being deployed across multiple continents and
there is a strong pipeline of prospective clients that could meaningfully
accelerate revenues from here.
Klarna Group PLC ("Klarna")
Klarna reached a major milestone in late 2025 by successfully debuting on the
public market, completing its initial public offering on 10 September 2025 on
the New York Stock Exchange.
Klarna's IPO was priced at $40 per share, which gave the company a starting
valuation of around $15.1 billion. The listing raised roughly $1.2 billion for
existing shareholders and was the largest listing by a Swedish company in the
US since 2018.
In preparation for becoming a public company, in early 2025, Klarna
established a new UK-based holding company (Klarna Group PLC) and bolstered
its board of directors with two appointments. Niclas Neglén, Klarna's Chief
Financial Officer since 2021, was appointed to the board in February 2025.
Neglén brings over two decades of banking and finance experience to the
board, having previously held senior roles at HSBC and GE Capital. Joining him
on the board is Markus Villig, the founder and CEO of European mobility
platform Bolt, who became one of Klarna's independent directors.
The Investment Adviser continues to be encouraged by Klarna's financial
performance with the company reporting its sixth consecutive quarter of
profitability in 2Q 2025. While Klarna did not post a profit in 3Q 2025, which
was primarily driven by the accounting treatment of its Fair Financing
product, revenues increased by +26% on a like-for-like basis to $903 million
and GMV rose by +23% on a like-for-like basis to $32.7 billion. Over 27
million new users were added during the period and 4 million customers signed
up to the Klarna Card since July, with these Card customers accounting for 15%
of global transactions in October.
Klarna's US business continues to grow strongly and benefit from key
partnerships. In the first half of 2025, US revenue increased by +38%
year-over-year, outpacing growth in other regions, and US gross profit almost
doubled (+93% year-on-year). This strong rate of growth continued through 3Q
with US GMV increasing by +43% year-on-year and US revenues increasing by
+51%. These developments leave Klarna well positioned for continued strong
growth in the US market, with progress here a real differentiator versus other
D2C Fintech players such as Revolut and Monzo.
Several strategic partnerships have been key to Klarna's recent growth, and
the Investment Adviser believes that these relationships will allow the
company to maintain strong levels of revenue growth over the coming quarters,
potentially driving a rerating. While analyst forecasts capture a near-term
spike in growth rates, these fade rapidly into 2027; it will be interesting to
see if this proves to be the case, or if revenue growth remains stronger for
longer.
Over the course of the last twelve months, Klarna has announced partnerships
with the likes of Stripe, Adyen, Worldpay, Walmart, eBay, Apple Pay and Google
Pay. These partnerships, spanning payments networks, ecommerce and technology,
enable Klarna to reach a much wider audience, making its payments solutions
accessible to millions of customers globally and in many instances, a default
payment option at checkout.
The accounting treatment of Fair Financing, Klarna's fixed term instalment
loan offering, and the natural lag between funding costs and base rates has
impacted margins in the near term, which has led to a decline in the gross
margin and profitability in recent quarters. The Investment Adviser believes
that these trends should reverse in coming periods and, combined with strong
revenue growth, should deliver strong profit growth.
The share price has fallen back since year end by approximately 18%, however,
it is hoped that these tailwinds should assist in driving a re-rating as they
materialise. The Investment Adviser retains a positive outlook on the future
performance of the business.
The Brandtech Group LLC ("Brandtech")
Over the past twelve months, Brandtech has delivered solid performance against
a tough backdrop and continued strategic progress, further establishing itself
as a global leader in marketing technology and generative artificial
intelligence (GenAI). Despite a challenging advertising market and broader
macroeconomic pressures, that have led to a de-rating of listed peers and a
decline in the value of this position, Brandtech delivered positive growth and
enhanced profitability.
Management has highlighted that the shift towards AI-driven workflows has
significantly improved margins, enabling the group to deliver greater value
for clients while operating with higher efficiency. Following the integration
of Jellyfish, acquired in 2023, the Group's annual revenues now exceed $1
billion, supported by a global workforce of more than 7,000 employees.
Brandtech continues to serve a blue-chip roster of clients, including eight of
the world's top ten advertisers and around sixty of the top one hundred global
brands. Long-standing partnerships with companies such as Google, Microsoft,
Unilever, LVMH and Diageo underline Brandtech's role as one of the world's
largest digital content partners. This diversified client base provides a
stable revenue foundation and validates the company's position at the
forefront of technology-enabled marketing.
Pencil, Brandtech's generative AI platform, has continued to demonstrate
strong growth and adoption. Since its acquisition in 2023, Pencil has
generated more than two million advertisements for over five thousand brands.
By leveraging data from more than $2.6 billion in historical media spend,
Pencil's AI models can predict advert performance, enabling clients to produce
creative content up to ten times faster and at a fraction of traditional
costs. Adverts generated through Pencil have achieved significantly higher
engagement and conversion rates, while cutting production costs by up to half.
These performance improvements have been validated across multiple major
clients and categories, delivering an average 40 percent uplift in return on
investment.
Adoption of Brandtech's generative AI capabilities has accelerated among major
global advertisers, albeit at a slower rate than the Investment Adviser
anticipated.
Unilever's Beauty and Wellbeing division, for example, has implemented a
bespoke "Beauty AI Studio" powered by Pencil, now operating in eighteen
markets. This platform has allowed Unilever to produce hundreds of
personalised digital ads per campaign-compared to a few dozen previously-while
reducing content creation times by approximately 30 percent. Other global
brands, including Miller Lite and Durex, have reported similar results,
achieving higher returns on advertising spend and substantially lower creative
production costs.
The Group has also established a series of high-profile strategic partnerships
that strengthen its AI ecosystem. In May 2025, Boston Consulting Group and
Pencil announced a global collaboration to accelerate AI adoption in
marketing, combining BCG's enterprise transformation expertise with Pencil's
generative AI technology. Brandtech also launched Pencil on Google Cloud
Marketplace, giving enterprise clients direct access to the platform within
their existing cloud environments, and entered into a partnership with Adobe
to integrate Adobe Firefly capabilities into Pencil Pro. Together, these
partnerships expand the reach and technical depth of Brandtech's offering
while embedding it more deeply into the workflows of large-scale marketers.
The Group has also introduced innovative product features such as
enterprise-grade model integrations and a generative AI carbon calculator,
underscoring its commitment to responsible innovation and sustainability.
Market conditions across the advertising and technology sectors remain
challenging, with many clients seeking greater efficiency and accountability
from their marketing investments. From conversations with market participants,
the Investment Adviser believes that, while the industry recognises the likely
benefits AI will bring to marketing, the widespread adoption of AI is proving
slower than it expected.
The Investment Adviser believes Brandtech is recognised as one of the most
innovative companies in its sector and as a global leader in generative AI
marketing, reflecting the success of its hybrid model that combines the
agility of a technology platform with the scale and expertise of a global
marketing organisation. With a robust balance sheet, an expanding network of
enterprise clients, and an integrated suite of AI tools that directly address
the evolving needs of global marketers, Brandtech looks to be in a strong
position to capitalise on the shift to AI, as the market converts.
wefox Holding AG ("wefox")
Over the course of the financial year, there have been significant changes at
wefox and the Investment Adviser is pleased with the progress that has been
made. A comprehensive strategic review was launched to refocus the business on
profitable core operations and the company has subsequently transitioned from
being a heavily loss-making business, to a profitable company - on an
underlying EBITDA basis - operating a capital-light Managed General Agent
("MGA") model.
Significant leadership changes have been made to guide this turnaround;
Joachim Müller was appointed as Group CEO in September 2024, succeeding
interim CEO, Mark Hartigan.
Additionally, a new Group CFO (Dieter Bartl) was appointed in October 2025 to
strengthen financial oversight and support the next phase of growth. These
leadership changes set the foundation for executing a future growth strategy
and accretive M&A.
To accelerate the roadmap to profitability, wefox streamlined its market
footprint, exiting several markets to concentrate on regions with sustainable,
profitable growth. Key actions included:
· Italy - Sale of wefox's Italian MGA and services entities to J.C.
Flowers & Co., providing additional financial flexibility and marking the
completion of the restructuring program
· Germany - Exit from the German market by divesting operations
(e.g. sale of Assona GmbH to Ecclesia Group and transfer of brokerage business
to IWV AG)
· Poland - Disposal of the Polish insurance portfolio as part of
refocusing on core markets
· Spain - Closure of the technology development hub in Spain amid
the consolidation of wefox's central technology platform
Following these exits, wefox is now focused on its strongest markets such as
Austria, the Netherlands, and Switzerland, where it holds leading market
positions. Notably, in the Netherlands wefox (via its TAF subsidiary) is the
number one term-life insurance MGA, illustrating the success of its
asset-light model.
As part of the strategic review and shift to an MGA model, wefox transitioned
away from owning insurance liabilities. In December 2024, the company agreed
to divest its insurance carrier, Liechtenstein-based wefox Insurance AG, to a
Swiss consortium led by BERAG (pending regulatory approval). This divestment
reduces capital requirements and aligns with wefox's focus on distribution
partnerships rather than underwriting. wefox's operations in Switzerland have
been right-sized to a distribution-only hub, emphasising advisory and
brokerage services.
Management has also implemented a rigorous cost cutting exercise. The Group's
central functions and executive layer were streamlined, with headcount reduced
from 339 to 45 full-time equivalents ("FTEs"), significantly lowering
operating expenses. The company also shut down its central tech platform,
reallocating resources to empower local market platforms (reflected in the
closure of tech hubs in Spain and France).
During the period, the company successfully completed a refinancing and
capital raise totalling €151 million to support the turnaround. This funding
included approximately €76 million in new equity from existing investors -
led by Chrysalis and Target Global - and a €75 million debt refinancing
package - led by Searchlight Capital. The infusion of capital, combined with
cost reductions, has improved liquidity and balance sheet strength.
The new asset-light MGA model and focused market approach are expected to
drive margin expansion and sustainable growth. Without pursuing further
M&A, the Investment Adviser anticipates a €100m EBITDA swing between
FY23 to FY26, with most of this bridge realised over the course of 2025.
The Company's carrying value of wefox reflects the work undertaken and its
position in the capital structure.
wefox is in a demonstrably better position than it was at the start of the
year but, given the scale of restructuring that has been undertaken, the
Investment Adviser is looking for a period of consistent delivery in the
coming year. With a much more efficient structure, enhanced management, and a
focused strategy, the Investment Adviser believes the foundations have been
laid to rebuild valuation. Part of that strategy could include M&A, which
might require some capital to execute.
Deep Instinct Limited ("Deep Instinct")
Over the first half of 2025, Deep Instinct announced a strategic partnership
with Amazon Web Services ("AWS") that could potentially drive the company's
ability to monetise its technologies. In June, the company achieved "Deployed
on AWS" status and was accepted into the AWS ISV Accelerate Program, a
designation that underscores both technical validation and joint go-to-market
alignment. This partnership represents a major milestone for Deep Instinct,
giving the company access to AWS's extensive marketplace, enterprise discount
programs, and customer network. It also enhances the visibility and
credibility of Deep Instinct's data-security offerings within large
enterprises undergoing digital transformation. The company's DSX for Cloud -
Amazon S3 solution is now positioned as a pre-emptive, zero-day data
protection platform designed to prevent previously unseen threats in real time
across AWS storage environments. The alignment with AWS reinforces Deep
Instinct's cloud-first strategy, extends its reach across hybrid and
multi-cloud ecosystems, and strengthens its position as an emerging leader in
proactive cybersecurity for cloud data.
In parallel with the AWS collaboration, Deep Instinct has continued to expand
its technology portfolio and deepen its use of artificial intelligence across
its products.
Early in 2025, the company introduced DIANNA, a generative-AI powered malware
analysis engine that leverages advanced foundation models to deliver instant
explainability of never-before-seen threats. DIANNA operates alongside the
company's deep-learning-based DSX Brain, producing near-instant threat
verdicts with extremely high accuracy and negligible false positives. This
innovation provides customers not only with prevention but also with
transparency into why specific threats were blocked, addressing one of the key
challenges facing AI-driven cybersecurity platforms. Later in the year, Deep
Instinct launched the next generation of DIANNA with faster analysis speeds,
broader data coverage, and deeper integration into enterprise security
operations, further differentiating its prevention-first model from
traditional detection-based approaches.
While Annual Recurring Revenue ("ARR") progress at Deep Instinct has been
slower than anticipated at the point of investment, which is reflected in the
Company's carrying value, along with a deterioration in the market performance
of Deep Instinct's listed peers, the company continues to develop its
technology and key strategic partnerships. The AWS partnership is expected to
expand its channel presence and accelerate enterprise adoption, while the
release of new AI-driven capabilities strengthens its differentiation in a
crowded cybersecurity market. These initiatives should be a good fit for
market, particularly as organisations continue to migrate sensitive workloads
to the cloud and demand stronger protections for data stored in hybrid
environments.
Secret Escapes Holding Limited ("Secret Escapes")
While the travel market has been resilient over the last reporting period,
Secret Escapes' underlying business performance across certain geographies has
been mixed. This is reflected in the Company's carrying value of the asset.
In the UK market, growth has been subdued, with increasing
customer-acquisition costs constraining the economics of re-engaging monthly
active users. While cost-base discipline has mitigated margin deterioration,
revenue momentum remains weaker than hoped and the UK business is yet to
return to the rates of growth the Investment Adviser has seen historically.
In contrast, the Slevomat brand, operating from the Czech Republic and serving
Central and Eastern Europe, has delivered stronger performance. Slevomat
achieved double-digit sales growth and improved margins over the period and
has now become the Group's largest profit centre.
Post year end the company signed a deal to sell the Slevomat business for an
undisclosed amount. Whilst the sale is yet to complete, the Investment Adviser
continues to work with management in finding a solution that enables the
Company to maximise value for current shareholders.
Wise PLC ("Wise")
In the six months to 30 September 2025 (1H 2026), Wise moved £84.9 billion
around the world for 13.4 million customers, representing a 24% increase in
volumes and an 18% increase in active customers compared against the same
period in the prior year. The company reported total income of £882.1 million
for the period, up 13% year-on-year, while underlying income rose to £749.5
million. Net income for the period was £187.2 million, around 14% lower than
a year earlier, reflecting continued investment in growth and infrastructure,
with the underlying profit before tax margin at 16.3% compared with 22.2% in
the prior year.
Wise continued to invest in its platform during the period, adding to its
growing network of direct payment system integrations. The company now has
seven live direct connections, including Brazil's Pix system, with Japan's
Zengin network expected to go live shortly. These integrations continue to
make Wise's platform faster and more efficient and 74% of all transfers were
completed instantly during the latest quarter. Lower unit costs have enabled
the company to continue reducing prices for customers, supporting both growth
and customer satisfaction.
Customer balances held across Wise accounts and investment products rose +37%
year-on-year to £25.3 billion as more users adopted Wise for both spending
and saving. The company reiterated its full-year guidance for underlying
income growth of 15-20% and an underlying profit before tax margin of around
16%, excluding one-off dual-listing costs. Management highlighted that Wise
remains well positioned to capture further growth in the expanding global
cross-border payments market.
The Company maintains a modest position in Wise.
Environmental, Social and Corporate Governance Report
Introduction
The intention of the ESG Report is to provide shareholders with a clear and
transparent insight into the Company's ESG approach.
ESG Objective
The Company does not pursue a dedicated sustainability objective and, under
the Sustainable Finance Disclosure Regulation ("SFDR"), is classified as an
Article 6 entity. It also does not adopt a label under the Sustainable
Disclosure Requirements ("SDR").
ESG Strategy
While the Investment Adviser does not specifically target
sustainability-focused investments, ESG considerations form an integral part
of the overall investment process. Evaluating ESG risks and practices is
essential to supporting long-term success and positive ESG outcomes are
encouraged through active stewardship.
Key ESG factors assessed include:
· Governance standards
· Human capital management
· Social considerations
· Carbon emissions, reduction strategies and net-zero commitments
This report provides an update on ESG progress across the portfolio over the
last 12 months. Data reflects the eight active portfolio companies, namely
Starling, Smart Pension, Klarna, wefox, Brandtech, Deep Instinct, Secret
Escapes and Wise. This ensures a like-for-like comparison and means that
previously reported figures may differ due to the removal of exited or
inactive portfolio companies. Selected case studies highlight examples of
strong ESG practices in individual portfolio companies but are not necessarily
representative of the entire portfolio.
ESG Roadmap
Last year, the Company committed to closing gaps in its ESG approach in
response to growing regulatory scrutiny and evolving reporting standards. The
Company has taken concrete actions during the year to strengthen its ESG
framework and deliver on that commitment.
During the year, the Company updated its Responsible Investment Policy,
ensuring alignment with market expectations and stakeholder priorities, more
clearly articulating the Investment Adviser's approach to engagement in its
processes.
The Company has also introduced a Code of Business Ethics that sets standards
for integrity, accountability and responsible conduct. This code applies
across the Company and its service providers, clearly defining the principles
and behaviours expected of everyone associated with the organisation. It
reinforces the Company's commitment to ethical practices and ensures that all
stakeholders operate with transparency and trust.
During the year the Company fulfilled its commitment to implement the ESG Data
Convergence Initiative ("EDCI") framework in its ESG data collection,
supplementing the existing metrics it collects from the portfolio.
The EDCI framework is a collaborative effort aimed at standardising the
collection and reporting of ESG data within the private equity industry. The
initiative seeks to create a unified approach to ESG metrics, making it easier
to benchmark and compare ESG performance across different portfolio companies
and investment vehicles. The initiative helps streamline ESG reporting
processes and enhances the quality and comparability of ESG data in the
private equity sector.
The Investment Adviser has gathered portfolio data for the period ended 31
December 2024, using the EDCI framework, and integrated this into its internal
processes and reporting, enhancing analysis and insight. Additional ESG
metrics have been incorporated into this report to provide greater
transparency. Looking ahead, during the year ending 30 September 2026, the
Adviser will take further steps to cleanse and benchmark this data, enabling
deeper insights and more meaningful comparisons across the portfolio, the
wider private markets universe and over time.
ESG Regulation
The Company is exposed to ESG regulation in the form of:
1) The Sustainable Finance Disclosure Regulation ("SFDR")
The SFDR exists to increase transparency on how financial market participants
integrate sustainability risks and opportunities into their investment
decisions and processes.
2) The Sustainable Disclosure Requirements ("SDR")
The SDR is designed to provide clear and comparable information about the
sustainability characteristics of financial products, helping consumers make
clear and informed decisions and to reduce the risk of greenwashing.
The Company considers the requirements of both the SFDR and SDR regulation,
including the anti-greenwashing rules. Its practices and the disclosures in
this document are prepared in compliance with that regulation.
3) The Task Force on Climate-related Financial Disclosures ("TCFD")
The TCFD is a global initiative established to develop voluntary
climate-related financial disclosures that companies and financial
institutions can use to provide clear, comprehensive and high-quality
information on the impacts of climate change. The Company's TCFD reporting can
be found on the Company's website.
The Company falls under the TCFD regulation by virtue of having a UK-based
AIFM.
4) The Modern Slavery Act 2015
Several of the Company's portfolio companies are required to make a Modern
Slavery Prevention Statement ("MSS"). The statement is voluntary for those who
are not.
Stewardship
Stewardship is central to the Company's investment approach. Active engagement
is maintained with portfolio leadership to drive strategic direction,
including ESG improvements. The Investment Adviser has board seats at five out
of eight (62%) portfolio companies and five out of six (83%) private portfolio
companies.
Private companies often lack publicly reported ESG data, so an internal
dashboard is used to track performance with data sourced directly from
portfolio companies. These insights guide ESG discussions and help shape
development plans.
When material ESG risks or governance gaps are identified, the Investment
Adviser works collaboratively with management to implement action plans.
Significant issues are reported to the Risk Committee of the Company, where
progress is monitored.
Corporate Governance
· 88% (2024: 88%) portfolio companies with at least one independent
director
· 50% (2024: 50%) portfolio companies with an independent
chairperson
· 50% (2024: 50%) portfolio companies that are ISO 27001 certified
Successful growth requires more than strategy; it demands solid governance
foundations. Private companies planning to go public must prepare for
heightened scrutiny and embrace experienced independent directors to guide
corporate development. Reducing reliance on founders and strengthening board
and executive capacity is critical to long-term success.
The Investment Adviser evaluates governance across multiple dimensions,
tailored to each portfolio company's size, jurisdiction and ownership
structure.
Metrics
Independent directors bring objectivity, expertise and accountability to the
boardroom. They challenge assumptions, reduce conflicts of interest and
strengthen governance, ensuring decisions serve all stakeholders. Their
diverse experience enhances strategic thinking, improves risk management and
builds investor confidence, making them essential for sustainable growth and
credibility.
Seven portfolio companies have at least one independent director on their
board, consistent with the prior period. The number of portfolio companies
with one independent director also remained consistent over the period.
Achieving ISO 27001 certification demonstrates a company's commitment to
world-class information security. It protects sensitive data, builds trust
with clients and partners, ensures compliance with regulations and reduces
risk. This certification signals robust governance and opens doors to new
business opportunities, making it a key driver of growth.
50% of portfolio companies retain an ISO 27001 certification, consistent with
the prior year.
Case Study
Klarna IPO
To strengthen its governance and signal IPO readiness, Klarna made a number of
changes to its board over the course of the period. The company added Markus
Villig, founder and CEO of Bolt, bringing expertise in scaling global tech
platforms, and formally included CFO Niclas Neglén to enhance financial
oversight. Existing Chairman Michael Moritz (former Sequoia partner) and CEO
Sebastian Siemiatkowski remain, ensuring continuity and credibility. Klarna
also diversified its board with leaders like Sarah Smith (ex-Goldman Sachs),
Omid Kordestani (ex-Google), Lise Kaae (Heartland CEO) and Roger W. Ferguson
Jr. (former Federal Reserve Vice Chair), adding depth in compliance,
technology and regulatory governance. In addition, Klarna replaced Sequoia's
representative Matt Miller with Andrew Reed, co-lead of Sequoia's growth
strategy, and removed long-time member Mikael Walther to reduce internal
conflicts.
Human Capital
· 63% (2024: new metric) portfolio companies with a groupwide
people strategy
· 88% (2024: new metric) portfolio companies with a Diversity,
Equity and Inclusion ("DEI") policy
· 27% (2024: 29%) average proportion of women in senior leadership
roles
Strong human capital management drives value creation. Investing in people
builds skills, boosts engagement and supports long-term success. The
Investment Adviser works to understand each company's approach - including DEI
- and engages to share best practices and identify improvements tailored to
portfolio company operating models.
Metrics
A strong people strategy aligns talent with business goals. It ensures the
right skills are developed and builds a sustainable pipeline of leaders. By
investing in employee engagement, companies reduce key-person risk, strengthen
governance, and future-proof their workforce for change and innovation. 63% of
the portfolio has a groupwide people strategy.
A strong DEI policy is essential for building a fair organisation. It ensures
equal opportunities, fosters diverse perspectives that drive better decision
making, and creates an inclusive culture where all talent is allowed to
thrive. DEI strengthens employer reputation, attracts top talent and enhances
long-term business performance by aligning people practices with social
responsibility and stakeholder expectations. 88% of the portfolio has a DEI
policy.
Having women in senior leadership drives fairer decision-making, reflecting
the diversity of customers and stakeholders. Gender-diverse leadership teams
are proven to improve financial performance, strengthen governance and enhance
company reputation. Female representation also signals a commitment to
equality and inclusion, helping attract top talent and build trust with
investors and clients. The average proportion of women in senior leadership
roles in the portfolio remained broadly stable over the period.
Case Study
Starling Bank - Women in Finance Charter Update
Starling Bank, a founding signatory of the Women in Finance Charter, continues
to lead on gender diversity in financial services. After surpassing its
initial target of 40% women in senior roles, Starling set a new goal: 50% by
2027. Current representation stands at 45% of the workforce, 36% of the
Executive team, 43% of the Board and 42% of senior managers.
To achieve this, Starling invests in initiatives that promote inclusion and
talent development. Its #WithWomen network supports mentoring and career
progression, while partnerships with Smart Works and Surviving Economic Abuse
provide resources for women entering or re-entering the workforce. The bank
also focuses on tech diversity, with over one-third of new tech hires being
women and collaborates with Code First Girls to grow female talent pipelines.
Beyond banking, Starling advocates for gender equality through campaigns like
Make Money Equal, sponsorship of women's football with Southampton FC Women
and Arsenal FC, and community programs that empower women and girls in sport
and leadership.
Social Impact
· 75% (2024: new metric) portfolio companies with a modern slavery
statement
· 25% (2024: new metric) portfolio companies with a corporate
philanthropy programme
Understanding and managing social impact is vital for long-term success.
Companies influence communities, employees and customers through their
operations, supply chains and policies. By prioritising social responsibility,
such as fair labour practices and community engagement, businesses build
trust, strengthen brand reputation, and attract talent and investors. Ignoring
social impact can lead to reputational damage, regulatory risk and loss of
stakeholder confidence. Embracing it creates shared value in an increasingly
purpose-focussed society.
The current portfolio is made up of companies tackling business challenges
head-on. In many cases, cutting-edge technology is accelerating their ability
to deliver transformative solutions, enabling rapid change and creating ripple
effects that extend beyond the business itself. This progress not only drives
commercial success but also opens the door to meaningful, positive impact on
society, where innovation meets purpose.
Metrics
A modern slavery statement demonstrates a company's commitment to human rights
and ethical business practices. It helps identify and mitigate risks of forced
labour and exploitation within supply chains, ensuring compliance with legal
requirements such as the UK Modern Slavery Act. Beyond compliance, it builds
trust with investors, customers and employees by demonstrating transparency
and accountability. In today's ESG aware environment, addressing modern
slavery is not only a moral obligation but also a strategic imperative for
reputation and sustainable growth; 75% of the portfolio has a modern slavery
statement.
A corporate philanthropy program demonstrates a company's commitment to social
responsibility and purpose beyond profit. It strengthens community
relationships, enhances brand reputation and builds trust with stakeholders.
By supporting causes aligned with company values, businesses can engage
employees, attract socially conscious investors and create positive social
impact; 25% of the portfolio has a corporate philanthropy programme.
Case Study
Starling Bank - Scam Intelligence and Fraud Prevention
Fraud cost UK consumers £1.2 billion in 2024, with purchase scams accounting
for £53 million in the first half of 2025. Tactics employed by fraudsters
often target those most vulnerable in society. To assist in reversing these
trends Starling Bank has introduced industry-leading tools to protect
customers from scams and fraud. Its features include Call Status Indicators,
which confirm in real time if a call is genuinely from Starling, helping
prevent bank impersonation scams. The bank has also introduced its AI-powered
Scam Intelligence product, allowing customers to upload screenshots of online
marketplace listings to detect potential fraud.
Scam Intelligence uses Google Cloud's Gemini AI models to analyse images and
text from online marketplace listings and flags instances where:
- Prices seem too good to be true
- Images are fake or reused
- Sellers refuse secure payment methods
- Pressure tactics urge quick transfers
Instant, personalised guidance is provided to customers so they can consider
their purchase before sending money.
Additional safeguards introduced by Starling include real-time payment
monitoring, multi-factor authentication, biometric login and Confirmation of
Payee checks. Starling educates customers through campaigns like
#StopChallengeProtect, blog posts, and social media updates, highlighting
common scams such as purchase fraud, impersonation and phishing. It is also a
signatory of the Contingent Reimbursement Model Code, setting high standards
for reducing Authorised Push Payment scams.
Environmental Impact
· 75% (2024: 63%) of portfolio companies have calculated their
Scope 1 and 2 emissions
· 50% (2024: 50%) of portfolio companies have made a net zero
commitment or plan to establish one
· 50% (2024: 50%) of portfolio companies have set at least one
short or medium-term carbon reduction target
The Investment Adviser uses its influence to help portfolio companies
identify, manage and mitigate climate-related risks and opportunities.
While the Company's tech-enabled, predominantly digital businesses have low
direct environmental impact and minimal carbon emissions, the Adviser
recognises that climate change will affect every sector and asset class. By
integrating climate considerations, the Investment Adviser aims to play a
meaningful role in driving positive change.
Metrics
Carbon reporting provides transparency on a company's environmental impact,
enabling stakeholders to assess progress and hold businesses accountable.
Setting carbon reduction targets turns ambition into action, creating a clear
roadmap for emissions management and aligning with global climate goals.
Together, these practices drive operational efficiency, mitigate regulatory
and reputational risks, and demonstrate leadership in sustainability, which is
increasingly critical for investor confidence. 75% of portfolio companies now
calculate their Scope 1 and 2 emissions, up on the prior year.
While an increasing number of portfolio companies report carbon emissions data
the number of companies committing to net zero or carbon reduction targets has
levelled off. This trend is reflective of the listed environment, where many
listed companies are scaling back climate pledges due to rising costs,
technical challenges and economic pressures to prioritise profitability. Legal
risks from greenwashing claims, inconsistent global regulations and slow
policy progress add uncertainty. With only a small fraction of those listed
companies on track to meet their goals, some are removing targets to maintain
credibility and reduce exposure to litigation.
Case Study
Smart Pension - Green Investment Funds
Smart Pension offers three fully sustainable lifestyle strategies: Smart
Sustainable Growth Core, Smart Sustainable Growth (default) and Smart
Sustainable Growth Plus. These funds invest exclusively in assets that deliver
positive environmental and social impact, including renewable energy, clean
water, healthcare and biodiversity projects. All underlying funds are
classified as Article 8 or 9 under the EU Sustainable Finance Disclosure
Regulation.
The default growth fund is committed to being net zero by 2040 and aims to
halve carbon emissions between 2019 and 2025. Investments include the AXA
Biodiversity Fund, Mirova Global Green Bond Fund and global equity funds
focused on carbon transition. Smart Pension prioritises decarbonisation over
offsetting, excludes harmful industries, and actively engages with companies
to improve ESG practices. Members can choose their level of sustainability and
cost, reflecting strong demand. Over 77% of members want their pension to
benefit people and the planet.
Smart Pension is also a signatory of leading climate initiatives and
integrates responsible investment and stewardship policies across all funds.
Investment Objective and Policy
Investment objective
The investment objective of the Company is to generate long term capital
growth through investing in a portfolio consisting primarily of equity or
equity-related investments in unquoted and listed companies.
Investment policy
Investments will be primarily in equity and equity-related instruments (which
shall include, without limitation, preference shares, convertible debt
instruments, equity-related and equity-linked notes and warrants) issued by
portfolio companies. The Company will also be permitted to invest in
partnerships, limited liability partnerships and other legal forms of entity
where the investment has equity like return characteristics.
For the purposes of this investment policy, unquoted companies shall include
companies with a technical listing on a stock exchange but where there is no
liquid trading market in the relevant securities on that market (for example,
companies with listings on The International Stock Exchange or the Cayman
Islands Stock Exchange). Furthermore, the Company shall be permitted to invest
in unquoted subsidiaries of companies whose parent or group entities have
listed equity or debt securities.
The Company may invest in publicly traded companies (including participating
in the IPO of an existing unquoted company investment), subject to the
investment restrictions below. In particular, unquoted portfolio companies may
seek IPOs from time to time following an investment by the Company, in which
case the Company may continue to hold its investment without restriction.
The Company is not expected to take majority shareholder positions in
portfolio companies but shall not be restricted from doing so. Furthermore,
there may be circumstances where the ownership of a portfolio company exceeds
50% of voting and/or economic interests in that portfolio company
notwithstanding an initial investment in a minority position. While the
Company does not intend to focus its investments on a particular sector, there
is no limit on the Company's ability to make investments in portfolio
companies within the same sector if it chooses to do so.
The Company will seek to ensure that it has suitable investor protection
rights through its investment in portfolio companies where appropriate. The
Company may acquire investments directly or by way of holdings in special
purpose vehicles, intermediate holding vehicles or other funds or similar
structures.
Investment restrictions
The Company will invest and manage its assets with the objective of spreading
risk, as far as reasonably practicable. No single investment (including
related investments in group entities) will represent more than 20% of Gross
Assets, calculated as at the time of that investment. The market value of
individual investments may exceed 20% of gross assets following investment.
The Company's aggregate equity investments in publicly traded companies that
it has not previously held an investment in prior to that Company's IPO will
represent no more than 20% of the Gross Assets, calculated at the time of
investment.
Subject in all cases to the Company's cash management policy, the Company's
aggregate investment in notes, bonds, debentures and other debt instruments
(which shall exclude for the avoidance of doubt convertible debt,
equity-related and equity-linked notes, warrants or equivalent instruments)
will represent no more than 20% of the Gross Assets, calculated as at the time
of investment.
The Company will not be required to dispose of any investment or rebalance its
portfolio as a result of a change in the respective value of any of its
investments.
Corporate Governance Statement
Chrysalis has a listing on the Closed Ended Investment Fund segment of the
London Stock Exchange Main Market and is a member of the Association of
Investment Companies (AIC). The Board has considered the Principles and
Provisions of the 2019 AIC Code of Corporate Governance (AIC Code), and a full
scope review of the Company's corporate governance processes and procedures
has been conducted with reference to the AIC Code by the Board and the Company
Secretary. The AIC Code addresses the relevant Principles and Provisions set
out in the UK Corporate Governance Code (the UK Code), as well as setting out
additional Provisions on issues that are of specific relevance to the Company.
The Board considers that reporting against the Principles and Provisions of
the AIC Code, which has been endorsed by the Financial Reporting Council and
the Guernsey Financial Services Commission, provides more relevant information
to shareholders. The Company has complied with the Principles and Provisions
of the AIC Code and in doing so has met its associated disclosure requirements
under paragraph 9.8.6 of the Listing Rules.
The AIC Code is available on the AIC website (www.theaic.co.uk). It includes
an explanation of how the AIC Code adapts the Principles and Provisions set
out in the UK Code to make them relevant for investment companies.
Key Governance Disclosures
Section 172(1) Statement
Through adopting the AIC Code, the Board acknowledges its duty to apply and
demonstrate compliance with section 172 of the UK Companies Act 2006 and to
act in a way that promotes the success of the Company for the benefit of its
shareholders as a whole, having regard to (amongst other things):
a) consequences of any decision in the long-term;
b) the need to foster business relationships with suppliers, customers
and others;
c) impact on community and environment;
d) maintaining reputation; and
e) acting fairly as between members of the Company.
The Board considers its duties under S.172 to be integrated within the
Company's culture and values. The Company's culture is one of respect for the
opinions of stakeholders, with an aim of carrying out its operations in a fair
and sustainable manner that is both instrumental to the Company's long term
success and upholds the Company's ethical values. The Board encourages
diversity of thought and opinion in accordance with its Diversity Policy and
would like to encourage stakeholders to engage freely with the Board of
Directors on matters that are of concern to them.
Stakeholders may contact the Company via the Company's dedicated e-mail
address (ChrysalisGSYTeam@iqeq.com (mailto:ChrysalisGSYTeam@iqeq.com) ), the
Company's LinkedIn page
(https://www.linkedin.com/company/chrysalis-investments-investment-trust/) or
by post via the Company Secretary on any matters that they wish to discuss
with the Board of Directors.
The Company is an externally administered investment company, has no
employees, and as such is operationally quite simple. The Board does not
believe that the Company has any material stakeholders other than those set
out in the following table.
Investors Service providers Community and environment
Issues that matter to them
Performance of the shares Reputation of the Company Compliance with Law and Regulation
Growth of the Company Compliance with Law and Regulation Impact of the Company and its activities on third parties
Liquidity of the shares Remuneration
Corporate Governance
Engagement process
Annual General Meeting The main service providers engage with the Board in formal quarterly meetings, Adherence to principles of appropriate ESG policies exists at both Company and
giving them direct input to Board discussions. investment level.
Frequent meetings with investors by brokers and the Investment Adviser and
subsequent reports to the Board Communication between Board and service providers also occurs informally on an Principles of socially responsible investing form a key part of the Company's
ongoing basis during the year. investment strategy.
Quarterly factsheets
Key Information Document
Rationale and example outcomes
The Board have engaged with investors in relation to the Company business over The Company relies on service providers as it has no systems or employees of The Investment Adviser works to ensure that sustainability and ESG factors are
the course of the year. its own. carefully considered and reflected in the Company's investment decisions.
The Board seeks to act fairly and transparently with all service providers, The Board of Directors travel as infrequently as possible and instead
and this includes such aspects as prompt payment of invoices. communicate, where they are able to, by video and conference call.
Going Concern Statement
The Going Concern Statement is made on page 55.
Viability Statement
The Viability Statement is made on page 55 and 56.
Fair, Balanced and Understandable Statement
The annual report and accounts taken as a whole are fair, balanced and
understandable and provide the information necessary for shareholders to
assess the Company's performance, business model and strategy. Further
information on how this conclusion was reached can be found within the Audit
Committee Report.
Assessment of Principal and Emerging Risks
The Board has undertaken a robust assessment of the Company's principal and
emerging risks, together with the procedures that are in place to identify
emerging risks. Further information on this assessment and an explanation on
how these risks are being mitigated and managed can be found on pages 57 to
59.
Review of Risk Management and Internal Control
The Board confirms that it has reviewed the Company's system of risk
management and internal controls for the year ended 30 September 2025, and to
the date of the approval of this annual report and audited financial
statements. For further details of the key risks and uncertainties the
Directors believe the Company is exposed to together with the policies and
procedures in place to monitor and mitigate these risks, please refer to pages
96 to 107 and note 18 of the annual report and audited financial statements.
The Board of Directors
The Board comprises six independent non-executive Directors, two of whom are
female, who meet at least quarterly, in addition to ad hoc meetings convened
in accordance with the needs of the business, to consider the Company's
affairs in a prescribed and structured manner. Further details concerning the
meetings attended during the year by the Board and its Committees can be found
on pages 42 to 43. All Directors are considered independent of the Investment
Adviser for the purposes of the AIC Code and Listing Rule 15.2.12A.
The Board is responsible for the Company's long term sustainable success and
the generation of value for shareholders and in doing so manages the business
affairs of the Company in accordance with the Articles of Incorporation, the
investment policy and with due regard to the wider interests of stakeholders
as a whole. For further information on how the Board considers the interests
of stakeholders in its decision making please see the S.172(1) statement on
page 36. Additionally, the Board have overall responsibility for the Company's
activities including its investment activities and reviewing the performance
of the Company's portfolio. The Board are confident that the combination of
its members is appropriate and is such that no one individual or small group
of individuals dominates the Board's decision making.
The Directors, in the furtherance of their duties, may take independent
professional advice at the Company's expense, which is in accordance with
provision 19 of the AIC Code. The Directors also have access to the advice and
services of the Company Secretary through its appointed representatives who
are responsible to the Board for ensuring that the Board's procedures are
followed, and that applicable rules and regulations are complied with.
To enable the Board to function effectively and allow the Directors to
discharge their responsibilities, full and timely access is given to all
relevant information.
Comprehensive board papers are circulated to the Board in advance of meetings
by the Company Secretary, allowing time for full review and comment by the
attending parties. In the event that Directors are unable to attend a
particular meeting, they are invited to express their views on the matters
being discussed to the Chairman in advance of the meeting for these to be
raised accordingly on their behalf. Full and thorough minutes of all meetings
are kept by the Company Secretary.
The Directors are requested to confirm their continuing professional
development is up to date and any necessary training is identified during the
annual performance reviews carried out and recorded by the Remuneration and
Nomination Committee.
The current Board have served since the Company's inception in October 2018,
with the exception of Margaret O'Connor who was appointed on 6 September 2021,
and have been carefully selected against a set of objective criteria. The
Board considers that the combination of its members brings a wealth of skills,
experience and knowledge to the Company as illustrated in their biographies
below:
Director Biographies
Andrew Haining (Chairman) (independent)
Andrew has had a 30-year career in banking and private equity with Bank of
America, CDC (now Bridgepoint) and Botts & Company. During his career,
Andrew has been responsible for over 20 private equity investments with
transactional values in excess of $1 billion.
Andrew holds several Guernsey and UK board positions.
Stephen Coe (senior independent)
Stephen serves as Chairman of the Audit Committee. He is currently a
Non-Executive Director of a number of private companies. Stephen has been
involved with offshore investment funds and managers since 1990, with
significant exposure to property, debt, emerging markets and private equity
investments. Stephen qualified as a Chartered Accountant with Price Waterhouse
in 1990.
Simon Holden (independent)
Simon is a Chartered Director ("CDir"), Fellow of the Institute of Directors
and brings a combination of private equity investing and deep equity capital
markets expertise to the Board. In his prior career in private equity, he was
an investment director and held interim-executive roles across several
portfolio companies whilst working at Terra Firma Capital Partners (and
Candover Investments prior to that).
For the past decade, he has represented the interests of shareholders in a
portfolio spanning:
• LSE-listed FTSE-250 alternative asset companies (infrastructure,
real estate, growth equity, IP rights, and activist mandates);
• blue-chip global private equity funds (including Permira);
• private operating companies (across energy transition,
industrials and business services); and
• pro-bono public sector advisory roles.
An experienced Senior Independent Director and FTSE-250 Risk Committee Chair,
he has successfully executed a wide variety of value creation and corporate
action strategies whilst navigating dynamic challenges and engaging with
shareholders constructively to align board action with their diverse
objectives.
Anne Ewing (independent)
Anne has over 40 years of financial services experience in banking, asset and
fund management, corporate treasury, life insurance and the fiduciary sector.
Anne has an MSc in Corporate Governance, an ACCA Diploma in Accounting and
Finance, is a Chartered Fellow of the Securities Institute and has held senior
roles in Citibank, Rothschilds, Old Mutual International and KPMG, and
latterly has been instrumental in the start-ups of a Guernsey fund manager and
two fiduciary licensees.
Anne has several non-executive directorships roles in financial services
companies and private equity funds in the Channel Islands.
Tim Cruttenden (independent)
Tim is Chief Executive Officer of VenCap International PLC, a UK-based asset
management firm focused on investing in venture capital funds. He joined
VenCap in 1994 and is responsible for leading the strategy and development of
the firm. Tim is also a NED of Polar Capital Technology Trust, where he is
Senior Independent Director. Prior to joining VenCap, Tim was an economist
and statistician at the Association of British Insurers in London. He received
his Bachelor of Science degree (with honours) in Combined Science (Economics
and Statistics) from Coventry University and is an Associate of the CFA
Society of the UK.
Margaret O'Connor (independent)
Margaret brings over 30 years of international experience commercialising
technology companies and evolving the governance structure and growth strategy
of investment funds. Her plural career includes serving on the board of a FTSE
250 investment trust and as Chairman of a Mauritius Venture Capital fund. Both
require stakeholder engagement to enhance long-term value creation and
oversight on disposal strategies. Her experience as a US AdTech CEO and CMO
- driving EU and Asia market expansions and leading a successful trade sale -
combined with her tenure as a MasterCard International New Technology
executive, shapes her board skill and mindset.
She earned her BA from Rutgers University and studied International Relations
at Princeton University before moving to Seoul, Korea to work for the Korean
Ministry of Finance.
Public Company Directorships
The following details are of all other public Company Directorships and
employment held by each Director and shared Directorships of any commercial
company held by two or more Directors:
Anne Ewing
None to be disclosed
Andrew Haining
None to be disclosed
Simon Holden
JPMorgan Global Core Real Assets Limited
Volta Finance Limited
Stephen Coe
None to be disclosed
Tim Cruttenden
Polar Capital Technology Trust PLC
Margaret O' Connor
None to be disclosed
Valuation Committee
The Board is of the view that the valuation process needs to be as efficient
as possible while also providing for comprehensive and independent oversight.
Consequently, the Board uses an independent Valuation Committee which
comprises of the following members:
Lord Rockley (Committee Chairman)
Anthony was an audit partner at KPMG until 2015, with a sector focus on
private equity and venture capital. Over a 34 year career with KPMG, Anthony
was responsible for auditing private equity and venture capital companies and
structures. Amongst other sector specific work, Anthony was a member of the
International Private Equity and Venture Capital Guidelines Board for 9 years.
Diane Seymour Williams
Diane Seymour Williams has a career spanning over 30 years in asset and wealth
management. She was a listed portfolio manager with Deutsche Morgan Grenfell
("DMG"), and became CIO and CEO of the asset management business in Asia.
After returning to the UK, Diane subsequently held a number of board positions
in the financial services sector. Currently she sits, inter alia, on the
boards of Patria Private Equity Trust PLC, Mercia Asset Management PLC and
SEI's European business. Diane brings extensive fund management and portfolio
oversight experience. In addition to her public company roles Diane sits on
the investment committees of Newnham College, Cambridge and the Canal &
River Trust.
Jonathan Biggs
Jonathan Biggs has worked in the venture capital industry for 25 years. For 20
years, up until 2021, he was the COO at Accel, a leading global venture and
growth capital investor, having been one of the company's first hires in
Europe. During his time at Accel in London, he raised over $2.5 billion in
five early-stage venture funds focused on Europe. For the last 5 years,
Jonathan has been an investor in venture capital funds, both as a Partner at
Top Tier Capital Partners where he led the European funds business, and prior
to that, as a Managing Partner at SVB Capital.
The fourth member of the committee is Tim Cruttenden who has been a director
of the Company since its formation.
Director Attendance
During the year ended 30 September 2025, the Board and Committee meetings held
and attended by the Directors were as follows:
Quarterly Board Meeting Audit Committee Meeting
Remuneration and nomination Meetings Risk Committee Meetings Management
Engagement Ad-hoc Meetings
Meetings
Director Attended/Eligible Attended/ Attended/ Attended/ Attended/ Attended/
Eligible Eligible Eligible Eligible Eligible
Anne Ewing 3/4 3/3 0/1 2/2 n/a 2/4
Andrew Haining 4/4 n/a n/a n/a n/a 4/4
Simon Holden 4/4 2/3 n/a 2/2 1/1 4/4
Stephen Coe 4/4 3/3 n/a 2/2 n/a 4/4
Tim Cruttenden 4/4 3/3 1/1 2/2 1/1 4/4
Margaret O'Connor 4/4 3/3 1/1 2/2 1/1 4/4
Valuation Committee Meetings
Member Attended/ Eligible
Lord Rockley 10/10
Diane Seymour-Williams 10/10
Jonathan Biggs 9/10
Tim Cruttenden 9/10
Division of Responsibilities
A schedule of matters reserved for the Board is maintained by the Company and
can be summarised as follows:
· Strategic Issues
· Financial Items such as approval of the half-yearly reports, any
quarterly announcements, any preliminary announcement of the final results and
the annual report and accounts including the corporate governance statement
· Treasury Items
· Legal and Administration
· Communications with shareholders
· Board Appointments and Arrangements
· Miscellaneous such as to approve the appointments of professional
advisers for any Group company in addition to the Company's Auditors
· Monetary Limits
The Directors have also delegated certain functions to other parties such as
the Valuation Committee, the Alternative Investment Fund Manager ("AIFM"), the
Investment Adviser, the Administrator, the Company Secretary, the Depositary
and the Registrar.
The Investment Adviser reports to the Board on a regular basis both outside of
and during quarterly board and Committee meetings, where the operating and
financial performance of the portfolio, together with valuations, are
discussed at length between the Board and the Investment Adviser. The
Directors have responsibility for exercising supervision of the Valuation
Committee and the Investment Adviser.
Board Committees
The Company has an Audit Committee, Remuneration and Nomination Committee,
Management Engagement Committee, Risk Committee and an Independent Valuation
Committee (together the "Committees"). The Terms of Reference for each
committee is available on the Company's website.
The Board believes that its established Committees are adequately composed,
and that each member has the necessary skills and experience to discharge
their duties effectively. All new Committee members will be provided with an
induction on joining the relevant Committee. The actions carried out by each
Committee since the previous quarterly board meeting are reported at each
meeting to the Board of Directors by the respective Committee chair.
Each Committee meeting is attended by the Company Secretary and comprehensive
minutes are kept, as well as a schedule of the action points arising from each
meeting.
Stephen Coe is the Chairman of the Audit Committee with Anne Ewing and Simon
Holden as members, with Margaret O'Connor as an observer. A full report
regarding the Audit Committee's activities during the year can be found in the
Audit Committee Report on page 66.
Anne Ewing is Chairman of the Remuneration and Nomination Committee, with
Margaret O'Connor and Tim Cruttenden as members. The Remuneration and
Nomination Committee meets at least once a year in accordance with the terms
of reference and reviews, inter alia, the structure, size and composition of
the Board. A full report regarding the Remuneration and Nomination Committee's
activities during the year can be found on page 45.
Margaret O'Connor is Chairman of the Management Engagement Committee, with
Simon Holden, Stephen Coe and Tim Cruttenden as members. The Management
Engagement Committee will meet formally at least once a year for the purpose,
amongst other things, of reviewing the actions and judgments of the Investment
Adviser and the AIFM, and the terms of the AIFM and Investment Advisory
Agreement. A full report regarding the Management Engagement Committee's
activities during the year can be found on page 49.
Simon Holden is Chairman of the Risk Committee, with Anne Ewing, Margaret
O'Connor, Stephen Coe and Tim Cruttenden as members. The Risk Committee will
meet formally, at a minimum once a year, though it has been agreed, that the
Risk Committee is convened twice a year, aligned with the Company's financial
reporting cycle and at such other times as the Chairman of the Committee deems
appropriate, for the purpose of, amongst other things, to ensure that there is
proper consideration and assessment risks and stresses ensuring that the
Investment Adviser develops appropriate strategies to protect the Group's
portfolio of investments. A full report regarding the Risk Committee's
activities during the year can be found on page 51.
Report of the Remuneration and Nomination Committee
Statement: Chairman of Committee
I am pleased to present the Remuneration and Nomination Committee report for
the year ended 30 September 2025. The composition of the Remuneration and
Nomination Committee meets with the requirements of the AIC Code and, in line
with good practice, membership is reviewed annually.
During the year, there have been no changes to the Directors' Remuneration
Policy or the Terms of Reference of the Remuneration and Nomination Committee.
No new Directors were appointed to the Board during the year.
In 2026 the Remuneration and Nomination Committee will review its recruitment
needs to help the Company further achieve its targets.
I am satisfied that the Remuneration and Nomination Committee is discharging
its responsibilities proficiently and recommend this report to the Board.
Anne Ewing, Chair of the Remuneration and Nomination Committee
Purpose and Aim of the Remuneration and Nomination Committee
The terms of reference of the Remuneration and Nomination Committee are set
out on the Company's website at
https://chrysalisinvestments.co.uk/investor-relations/
(https://chrysalisinvestments.co.uk/investor-relations/) . The primary
responsibility of the Remuneration and Nomination Committee is, in relation to
remuneration, to determine and agree with the Company's Board of directors
(together the "Board" and individually a "Director") the framework or broad
policy for the remuneration of the Company's chairman and non-executive
Directors in accordance with the Company's articles of incorporation (the
"Articles") and applicable law and, in relation to nominations, to review the
structure, size and composition (including the skills, knowledge and
experience) required of the Board compared to its current position and make
recommendations to the Board with regard to any changes as necessary.
Membership and Meetings of the Remuneration and Nomination Committee
The Remuneration and Nomination Committee met formally twice during the
reporting period.
The members of the Remuneration and Nomination Committee are as follows:
· Anne Ewing (Chairperson)
· Tim Cruttenden
· Margaret O'Connor
Composition, Succession and Evaluation of the Board
At its meetings, the Remuneration and Nomination Committee reviewed and
reaffirmed the Company's policy whereby no Director will serve for more than
nine years (such policy being aligned to the AIC Code). The Remuneration and
Nomination Committee confirms that no Director has served for longer than nine
years, due to the Company being incorporated in October 2018.
No new directors were appointed to the Board during the financial year as the
Board focussed on, amongst other things, strategic matters and the
recommendations which are to be presented to shareholders at the Company's
2026 Annual General Meeting.
The Board will continue to work towards meeting the targets set by the
Hampton-Alexander Review on gender balance and the Parker Review into ethnic
diversity in FTSE leadership.
The Company provides information as set out in the table below, on the
progress made on board diversity targets:
· At least 40% of the Board is female
· At least one senior position on the Board is held by a woman
· At least one individual on the Board is from a minority ethnic
background
Gender Identity/Ethnic background Number of Board members % of the Board Number of Senior Positions Held
Female 2 33% 2
Male 4 67% 3
White British or other White group 6 100% 5
Black/African/Caribbean/Black British/Asian/Other 0 0 0
The data detailed above has been obtained from and confirmed by each Board
Director.
The Board notes that Chrysalis is an externally managed investment company
with a Board composed entirely of non-executive directors. Its senior
positions include the Chair, the Senior Independent Director (SID), and the
Chairs of any permanent Board committees.
The Company has yet to achieve the appointment of a candidate from a minority
ethnic background. In its recruitment processes the Board seeks to ensure
that it is presented with a diverse set of candidates from which it appoints
the candidate best suited to the role. A major factor in the Board's
succession planning process is to maintain and demonstrate management and
control of the Company in the jurisdiction of its incorporation in relation to
the size of the Board. This can significantly impact the size and
suitability of the candidate pool from which the company can recruit.
The updated report from the Parker Review in 2022 also recognised such
constraints where the size of typical investment companies such as Chrysalis
can reduce the opportunity to make further diverse appointments.
During 2025 the Committee refreshed its succession planning and undertook a
review of the attributes and skills of the current Board and made
recommendations to the Board. It was concluded that the composition of the
Board remained balanced for the needs of the Company at this time.
During any future search, due regard will be given to equal opportunity,
diversity and inclusion for this appointment.
Committee Memberships
Audit Committee Risk Committee Valuations Committee Management Engagement Committee Remuneration and Nomination Committee
Chaired by: Chaired by: Chaired by: Chaired by: Chaired by:
S Coe S Holden Lord Rockley* M O'Connor A Ewing
A Ewing S Coe D Seymour- Willliams* S Coe T Cruttenden
S Holden A Ewing J Biggs* T Cruttenden M O'Connor
T Cruttenden T Cruttenden (Board Representative) S Holden
M O'Connor
*Independent
Review of Board Performance and Development
The Board has established a three-year cycle for the evaluation of its own
performance which is initiated by the Committee and led by the Chair. The
Chair's performance is evaluated by the Senior Independent Director. An
external board review was last conducted in October 2023 by Board Alpha,
followed by internal reviews for the post financial year ends of 2024 and 2025
The output of previous reviews was positively received by the Board leading to
a number of constructive actions to undertake board training and governance
matters. Actions arising from the results of the internal 2025 review are
currently a work in progress.
The next externally led board effectiveness review will be carried out in
relation to the financial year ending September 2026.
During the year the Board commissioned an external corporate governance review
which covered Board and delegated Administrator responsibilities in relation
to:
· Market Abuse Regulations
· Disclosure Guidance and Transparency Rules
· Listing Rules
· Articles of Incorporation
· Company Law
· AIC Code of Corporate Governance
· Industry good practice
This extensive review was presented by Lavery Governance Consulting to the
Board on 28 September 2025, and recommendations are being incorporated into
future operations. A main takeaway has been to reinforce and enhance
knowledge, further develop skills and good practices.
Review of Remuneration
The Company's policy is that the fees payable to the Directors should reflect
the time spent by the Board on the Company's affa
The policy is for the Chairman of the Board, the Chairs of the Audit Committee
and Risk Committee to be paid a higher fee than the other Directors in
recognition of their more onerous roles and more time spent. The Board may
only amend the level of remuneration paid within the limits of the Articles
(i.e. £500,000 per annum maximum).
During the financial year one off payments were made to each of the Chairman
and Audit Committee Chairman. The Chairman received £40,000 for work
relating to the strategic development of the Company. The Audit Committee
Chairman received £30,000 for work with legal advisers to reach settlement on
a portfolio matter.
The table illustrated below is provided to enable shareholders to assess the
relative size of spend on Director remuneration. The figures provide a
comparison against fees payable to the Investment Adviser and the Company's
Net Asset Value ("NAV").
Total Director Remuneration FY/E 2025 £477,500
Investment Adviser Fees £4,748,172
Investment Adviser Performance Fees £nil
NAV at year end £874,570,785
A comparison of the Company's remuneration against its competitors was
undertaken by the Committee and a view taken on current market conditions,
noting the trajectory of inflation rates and the time commitment and
activities of the Board. The Remuneration and Nomination Committee
recommended, and the Board resolved, that there should be no increase in
remuneration for directors for the financial year ending 30 September 2026.
Director base fees actual Director base fees proposed FY/E 2026
FY/E 2025 £
£
Chairman - A Haining 85,000 85,000
Audit Committee Chair/SID - S Coe 67,500 67,500
Risk Committee Chair 67,500 67,500
- S Holden
Valuation Committee Board Representative - T Cruttenden 62,500 62,500
Directors - M O'Connor/ 62,500 62,500
A Ewing
Anne Ewing
Chair of the Remuneration and Nomination Committee, Chrysalis Investments
Limited
Report of the Management Engagement Committee
I am pleased to present the Management Engagement Committee ("MEC") report for
the year ended 30 September 2025. The composition of the MEC meets with the
requirements of the AIC Code and, in line with good practice, membership is
reviewed annually.
During the year, the Terms of Reference of the Committee were reviewed and the
MEC agreed to update Section 7.1 of the Terms of Reference to ensure the
Investment Adviser complied with the Company's Capital Allocation Policy. No
changes to the composition of the Committee were recommended at this time.
I am satisfied that the Committee is discharging its responsibilities
proficiently and recommend this report to the Board.
Margaret O'Connor, Chair of the MEC
Purpose and Aim of the Management Engagement Committee
The Terms of Reference of the MEC are set out on the Company's website. The
primary responsibility of the MEC is to review, annually, the compliance of
the AIFM and Investment Adviser with the Company's investment policy and AIFM
and Investment Advisory Agreement, as well as to keep under review the
performance of all other key service providers involved in supporting the
Company and its operations, to agree with the Company's Board of Directors the
framework for annual evaluations of these professional services, and to make
recommendations to the Board with regards to any changes as necessary.
Membership and Meetings of the Management Engagement Committee
The MEC met formally on 30 September 2025.
The members of the MEC are as follows:
· Margaret O'Connor (Chairperson)
· Tim Cruttenden
· Simon Holden
· Steve Coe
Priorities This Past Year
1. To ensure appropriate resourcing at, and reporting from, the
Investment Adviser.
2. To ensure appropriate investor engagement.
3. To evaluate options for modifying the AIFM and Investment Advisory
Agreement ahead of the 2027 Continuation Vote.
Review of Service Providers
· The MEC was pleased to receive comprehensive feedback from all
service providers during its annual review.
· The MEC recognised the Investment Adviser's effective realisation
strategy on three assets this past year.
· The MEC engaged with the Investment Adviser about leveraging the
investor director positions they have assumed on the Starling, wefox, Smart,
Deep Instinct and Secret Escapes boards to influence strategy, resource
allocation, and realisation pathways and timelines for these assets.
· The MEC continued its review of the Investment Adviser's terms to
ensure value for money against the investment policy and in delivering the
Company's strategic objectives. The current AIFM and Investment Advisory
Agreement allows for the appointment of the Investment Adviser to be
terminated by giving not less than 6 months' notice.
· Proposed terms for the future AIFM and Investment Advisory
Agreement will be shared at the 2026 AGM.
· The Investment Adviser and AIFM provided the MEC with 3rd party
assurance that each of their environments were fit for purpose against NIST
Cyber Security Frameworks and provided recommended best practice improvements.
· The AIFM completed its review of the Company's compliance with
updates to London Stock Exchange listing rules.
· Finally, the MEC recommended to the Board that they request
assurance from IQ EQ Fund Services (Guernsey) Limited ("IQ EQ") regarding the
Company's compliance with the Financial Conduct Authority 2024 listing rules.
Margaret O'Connor
Chair of the Management Engagement Committee, Chrysalis Investments Limited
Report of the Risk Committee
I am pleased to present the Report of the Risk Committee (the "Committee") of
the Company for the year ended 30 September 2025.
Overview
The terms of reference of the Risk Committee are set out on the Company's
website at https://chrysalisinvestments.co.uk/investor-relations/.
The role of the Risk Committee is to ensure that the Board receives due
consideration and assessment of the opportunities, risks and stress scenarios
within which the Company operates and to ensure that the recommended actions
of the Investment Adviser protect its portfolio of investments.
Specifically, the Risk Committee:
· Recommends an overall risk appetite to the Board, monitors the
principal risks to which the Company is exposed and evaluates the strength of
the mitigating controls;
· Reviews the policies and process for identifying and assessing
business risks and the management of those risks by the Company;
· Monitors key risk exposures ensuring that the Investment Adviser
is exercising appropriate control to reduce the likelihood of risk
crystallisation resulting in financial loss, reputational damage or regulatory
concern;
· Reviews, challenges, monitors and approves stress and scenario
tests;
· Monitors investments so that they are aligned with the agreed
risk appetite;
· Reviews major initiatives such as related party acquisitions or
initiatives in new geographies or sectors, to be assured that appropriate due
diligence has been carried out and that any associated movement in risk
profile remains within risk appetite; and
· Provides oversight and advice to the Board in relation to the
current and emerging risk exposures of the Company.
The members of the Risk Committee are as follows:
· Simon Holden (Chairman)
· Stephen Coe
· Tim Cruttenden
· Anne Ewing
· Margaret O'Connor
The Company Chairman, Andrew Haining, is also invited to attend meetings of
the Risk Committee in an observer capacity.
Status of the Risk Committee
Following changes outlined in last year's Annual Report, the Risk Committee
has met twice in the year since September 2024 (within its Terms of
Reference), such frequency reflecting the scrutiny deemed necessary to changes
in the Company's risk factors. In the other quarters, the Board receives a
more streamlined risk report that includes operational risk reporting from the
Investment Adviser. Beyond this, as Chair of the Committee, I am the primary
point of alert for material risk indicators as Reportable Risk Events on an
'as-arising' basis.
Risk Classes
The Committee reviews the risk profile of the Company under a series of
pre-defined risk classes. Each risk class comprises separately identified and
scored risks and mitigating controls.
The Company's risk classes are prioritised in order of their highest overall
residual risk ratings with this process refreshed (at least) annually:
1. Relative Performance - notwithstanding the strong NAV performance
over the last 12 months, the Company's NAV per share return is lower than some
growth equity peers, and behind the adjacent listed private equity asset class
over both three- and five-year intervals.
2. Portfolio Performance - the 'equity roadmap' each portfolio company
follows remains dynamic and whilst there has been positive progress on
strategic milestones towards profitability across the portfolio, performance
remains difficult to forecast with certainty. Divestments, buybacks and
movements in the fair values of the Company's holdings have led to a further
increase in the concentration of the portfolio during the year.
3. Financial/ Capital Markets - notwithstanding strong US technology
trends, UK markets and investor sentiment has been volatile towards growth
equity as a mandate. Against this backdrop, the Company's sustained Capital
Allocation Policy has served to reduce the prevailing discount to NAV.
4. Liquidity Management - the Company's liquidity position has
improved markedly in the year. Consequently, the risk score for this risk
class has risen the most across all risk classes as the use of this liquidity
represents a significant opportunity cost for shareholders. This is a
strategic topic that the Board has consulted on extensively with shareholders
post year-end.
5. Investment Decisions - cognisant that no new investments are
permitted under the current Capital Allocation Policy, follow-on investment is
permitted, and the Committee retains oversight of both the AIFM and
Investments Adviser's due diligence processes.
6. Conflict and Compliance Management - robust governance was noted
across all stakeholder relationships during the year. It is pleasing to see
the Investment Adviser is now represented in the boardrooms of Starling, Smart
Pension, wefox, Deep Instinct and Secret Escapes as members of the company
boards.
Risk classes assessed to be well controlled but with the potential for high
impact if crystallised:
7. Regulatory and political - a 3(rd) party health check was completed
during the year to ensure all legal, regulatory and corporate governance
obligations of the Company are being met. Minor refinements were recommended
to ensure adherence with industry best practice.
Risk classes currently judged to have a lower overall residual risk rating:
8. The Environment, Social Impact and Good Governance ("ESG") - the
Company's policy is addressed in the Environmental, Social and Governance
report.
9. Portfolio Construction and Investment Decisions - liquidity
constraints and the Capital Allocation Policy have halted new portfolio
additions for a number of years. Shareholders are aware of this and understand
that disposals, capital redemptions via buybacks and fair value movements will
result in diminishing diversification within the residual portfolio.
10. Valuation - the Independent Valuation Committee continues to provide
insightful and consistent oversight of the quarterly portfolio valuation
process. Valuation risk has increased considering a more concentrated
portfolio, where a change in the value of one individual asset can have a more
marked effect on the Company's NAV.
11. Central Management - governance, counterparty, foreign exchange and
treasury risk management controls, some under delegation to specialist third
party service providers, all remain effective.
Finally, as a standing item, the Risk Committee considers:
12. Horizon Risks - themes emerging that could have an outsize impact or
influence on the prospects of our target sectors and/or portfolio companies
and this year, AI adoption has been a recurring theme.
In aggregate, the residual risk profile of the Company has risen slightly this
year. I'm satisfied the mitigating control environment remains fit for purpose
and that this rise is rather a result of the increased impact and likelihood
of change to i) the prospects of the Company's portfolio of assets, and ii)
the evolution of the Company under the existing Capital Allocation Policy,
that is feeding through to heightened sensitivities. This is consistent with a
realisations-focused strategy and narrowing of diversification.
Recommendation
I remind shareholders every year that growth equity as an asset class accepts
a higher appetite for risk to find investment opportunities in companies whose
innovative business models stand to disrupt established industries and
markets, bringing with it the potential for outsized returns. Inevitably,
there have been some investment failures in the Company's portfolio which
share some common vintage and investment characteristics. However, in the year
and in quick succession, the Company has also crystalised profitable returns
on investments in both Featurespace and InfoSum. The Company's portfolio,
whilst smaller again than the prior year, contains fewer, even higher
conviction holdings; Starling Bank chief amongst them in terms of
concentration risk.
I am satisfied that the Risk Committee is discharging its responsibilities
proficiently. This report highlights the Committee's approach to ensuring the
risks accepted under the Investment Policy continue to be appropriately
overseen and managed and so I recommend this report to the Board.
Simon Holden
Chairman of the Risk Committee, Chrysalis Investments Limited
Directors' Report
The Directors present their Annual Report and the Audited Financial Statements
of the Company for the year ended 30 September 2025.
Principal Activities and Business Review
The investment objective of the Company is to generate long term capital
growth through investing in a portfolio consisting primarily of equity or
equity-related investments in unquoted companies.
The Directors do not envisage any change in these activities for the
foreseeable future. A description of the activities of the Company in the year
under review is given in the Chairman's Statement and the Investment Adviser's
Report.
Business and Tax Status
The Company has been registered with the GFSC as a closed-ended investment
company under RCIS Rule and Protection of Investors ("POI") Law and was
incorporated in Guernsey on 3 September 2018. The Company operates under The
Companies (Guernsey) Law, 2008 (the "Law").
The Company's shares have a listing and are admitted to trading on the Closed
Ended Investment Fund segment of the London Stock Exchange's Main Market for
listed securities.
The Company's management and administration takes place in Guernsey and the
Company has been granted exemption from income tax within Guernsey by the
Administrator of Income Tax. It is the intention of the Directors to continue
to operate the Company so that each year this tax-exempt status is maintained.
In respect of the Criminal Finances Act 2017, which has introduced a new
corporate criminal offence of 'failing to take reasonable steps to prevent the
facilitation of tax evasion', the Board confirms that they are committed to
zero tolerance towards the criminal facilitation of tax evasion.
Alternative Investment Fund Managers Directive
The Company is a non-EEA-domiciled 'Alternative Investment Fund' ("AIF"), as
defined by the Alternative Investment Fund Managers Directive ("AIFMD"). From
1 October 2023 to 31 March 2024, the Company was a self-managed AIF and
procured portfolio management services from Jupiter Investment Management
Limited ("JIML"), under a Portfolio Management Agreement dated 1 July 2022. On
29 January 2024, the Company entered into an AIFM and Advisory Agreement with
G1O and CIP LLP respectively. Under this agreement, with effect from 1 April
2024, G10 was appointed as the AIFM to the Company. CIP LLP became Investment
Adviser to G10. CIP LLP is an appointed representative of G10 which is
authorised and regulated by the Financial Conduct Authority.
The AIFMD, as transposed into the FCA Handbook in the UK, requires that
certain pre-investment information be made available to investors in AIFs
(such as the Company) and that certain regular and periodic disclosures are
made.
Foreign Account Tax Compliance Act ("FATCA")
FATCA requires certain financial institutions outside the United States ("US")
to pass information about their US customers to the US tax authorities, the
Internal Revenue Service (the "IRS"). A 30% withholding tax is imposed on the
US source income and disposal of assets of any financial institution within
the scope of the legislation that fails to comply with this requirement.
The Board of the Company has taken all necessary steps to ensure that the
Company is FATCA compliant and confirms that the Company is registered and has
been issued a Global Intermediary Identification Number ("GIIN") by the IRS.
The Company will use its GIIN to identify that it is FATCA compliant to all
financial counterparties.
Common Reporting Standard
The Common Reporting Standard is a global standard for the automatic exchange
of financial account information developed by the Organisation for Economic
Co-operation and Development ("OECD"), which has been adopted in Guernsey and
which came into effect in January 2016.
The Company is subject to Guernsey regulations and guidance on the automatic
exchange of tax information and the Board will therefore take the necessary
actions to ensure that the Company is compliant in this regard.
Going Concern
The Directors have adopted the going concern basis in preparing the Audited
Financial Statements.
In assessing the going concern basis of accounting, the Directors have
considered the guidance issued by the Financial Reporting Council, the
Company's own financial position, the status of global financial markets,
various geopolitical events and conflicts, the current macroeconomic climate
and other uncertainties impacting on the Company's investments, their
financial position and liquidity requirements.
At the year end, the Company had liquidity including a current cash position
of £118,118,000 (2024: £44,612,000), a net current asset position of
£55,122,000 (2024: £44,660,000) and liquid listed investments amounting to
£118,361,000 (2024: £2,015,000); £115,256,000 of which is locked-up until
10 March 2026 (2024: £nil).
On 24 September 2024, the Company agreed a £70,000,000 debt facility with
Barclays Bank PLC which was fully drawn on 1 October 2024. Interest accrues at
a market-rate margin plus the daily SONIA rate. The facility matures on 30
September 2026. After the financial year end the Company repaid £10,000,000
of the facility. The balance of the facility (£60,000,000) remains in place
to ensure the Company retains the "buffer" element of the Capital Allocation
Policy ("CAP"), which is in place to fund follow on investment requirements
and working capital.
The Company generates liquidity by raising capital and from exiting
investments. It uses liquidity by making investments, paying company expenses
and making returns to shareholders. The Directors ensure it has adequate
liquidity by regularly reviewing its financial position and forward-looking
liquidity requirements. The Directors' going concern assessment includes
consideration of a range of likely downside scenarios which measure the impact
on the Company's liquidity of differing assumptions for portfolio valuation,
exits, follow-on investment requirements, the settlement of the Company's
liabilities and payment of expenses.
In assessing the going concern basis of accounting, the Directors have also
considered the proposals to maximise value and returns for shareholders,
exploring opportunities for realisations over a three-year time horizon.
Taking all matters into account, the Directors have a reasonable expectation
that the Company will continue in operational existence for at least twelve
months from the date of approval of the of the Annual Report and Audited
Financial Statements, and continue to adopt the going concern basis in
preparing them.
Viability Statement
The Directors have assessed the viability of the Company over the three-year
period to September 2028. The Directors consider that three years is an
appropriate period to assess viability given the Company's style of investment
and is a sufficient investment time horizon to be relevant to shareholders.
Choosing a longer time period can present difficulties, given the lack of
longer-term economic visibility and the need for adaptation that this will
inevitably create for the Company and its portfolio.
In their assessment of the viability of the Company, the Directors have
considered the Company's principal and emerging risks and uncertainties,
organised into Risk Classes by the Risk Committee (page 52).
The Directors have reviewed financial projections which consider:
· Available liquidity (Risk Class 1: Liquidity Management)
· The ability of the Company to raise capital (Risk Class 2:
Financial/Capital Market)
· The performance (Risk Class 3: Portfolio Performance) and value
of the existing portfolio (Risk Class 11: Valuation)
· The ongoing expenses of the Company
The Directors' considered a severe downside scenario which models:
- A significant economic event, which results in a deterioration
of portfolio company performance and a recalibration of public and private
markets leading to a compound 25% per annum decrease in the aggregate
portfolio value over a three-year economic cycle.
- The Company honours the committed capital return under the CAP
and does not raise further capital.
- The Company repays the Barclays debt facility.
- Dislocation of public and private markets, including the
prolonged closure of the IPO market, resulting in the inability to make
portfolio exits.
- A sustained period of inflation of approximately 10% per annum.
At year end, the Company has liquidity including a current cash position of
£118,118,000 (2024: £44,612,000), a net current asset position of
£55,122,000 (2024: £44,660,000) and liquid listed investments amounting to
£118,361,000 (2024: £2,015,000); £115,256,000 of which is locked-up until
10 March 2026 (2024: £nil). This available liquidity would sustain the
business over the course of the viability period.
As part of the viability assessment, the Directors have also considered the
proposals to maximise value and returns for shareholders, exploring
opportunities for realisations over a three-year time horizon.
The Directors, having considered the above and having carried out a robust
assessment of the principal and emerging risks facing the Company, have
concluded that there is a reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they fall due over the
three-year period to September 2028.
Results and Dividends
The results attributable to shareholders for the year are shown in the
Statement of Comprehensive Income.
The Directors have not declared a dividend for the year (2024: £nil).
Directors
The Directors of the Company who served during the year and to date are set
out on pages 39 to 44.
Directors' Interests
The Directors held the following interests in the share capital of the Company
either directly or beneficially as at 30 September 2025, and as at the date of
signing these Audited Financial Statements:
Number of % of Ordinary Shares outstanding
Ordinary Shares as at 30 September 2025
Andrew Haining 79,000
0.0155
Stephen Coe 60,909
0.0120
Simon Holden 89,500
0.0176
Anne Ewing 55,000
0.0108
Tim Cruttenden 21,298
0.0042
Margaret O'Connor -
-
S Cruttenden (son of Tim Cruttenden) 11,170
0.0022
As at 30 September 2024 the following Directors had holdings in the Company:
Number of % of Ordinary Shares outstanding
Ordinary Shares as at 30 September 2024
Andrew Haining 79,000
0.0133
Stephen Coe 60,909
0.0102
Simon Holden 89,500
0.0150
Anne Ewing 55,000
0.0092
Tim Cruttenden 21,298
0.0036
Margaret O'Connor -
-
S Cruttenden (son of Tim Cruttenden) 11,170
0.0019
Under their terms of appointment, the Directors' total remuneration (including
one-off fees) are as disclosed below:
The Directors' compensation is reviewed annually and effective 1 October 2025,
each Director is paid a basic fee of £62,500 (2024: £62,500) per annum by
the Company. In addition to this, the Chairman will receive an extra £22,500
(2024: £22,500) per annum. The Risk Committee Chairman will receive an extra
£5,000 (2024: £5,000) per annum and the Audit Committee Chairman will
receive an extra £5,000 (2024: £5,000) per annum. Refer to page 48 for more
information regarding Directors' remuneration.
Lord Rockley, Diane Seymour-Williams and Jonathan Biggs receive £42,000
(2024: £40,000) each per annum as members of the Valuation Committee. Lord
Rockley, Diane Seymour-Williams and Jonathan Biggs are not Directors of the
Company.
Risks and Uncertainties
There are several potential risks and uncertainties which could have a
material impact on the Company's performance and could cause actual results to
differ materially from expected and historical results.
The Risk Committee has overall responsibility for risk management and control
within the context of achieving the Company's objectives. The Board agrees the
strategy for the Company, approves the Company's risk appetite and the Risk
Committee monitors the risk profile of the Company. The Risk Committee also
maintains a risk management process to identify, monitor and control risk
concentration.
The execution of the Company's Investment Policy requires a high appetite for
risk and opportunity, and the Risk Committee's terms of reference, controls
and reporting have been designed to manage this environment as far as
practicable. The Board's responsibility for conducting a robust assessment of
the principal and emerging risks is embedded in the Company's risk map, which
helps position the Company to ensure compliance with the Association of
Investment Companies Code of Corporate Governance (the "AIC Code").
The principal risks to which the Company will be exposed are given in note 18
to the Annual Report and Audited Financial Statements.
The main risks that the Company faces arising from its financial instruments
are:
(i) market risk, including:
• price risk, being the risk that the value of investments will
fluctuate because of changes in more investee-company specific performance as
well as market pricing of comparable businesses;
• interest rate risk, being the risk that the future cash flows of
a financial instrument will fluctuate because of changes in interest rates;
and
• foreign currency risk, being the risk that the value of
financial assets and liabilities will fluctuate because of movements in
currency rates.
(ii) credit risk, being the risk that a counterparty to a financial
instrument will fail to discharge an obligation or commitment that it has
entered with the Company.
(iii) liquidity risk, being the risk that the Company will not be able to
meet its liabilities when they fall due. This may arise should the Company not
be able to liquidate its investments.
(iv) company failure, being the risk that companies invested in may fail
and result in loss of capital invested.
To manage such risks the Company shall comply with the investment restrictions
and diversification limits provided for in the Prospectus. The Company will
invest and manage its assets with the objective of spreading risk. Further to
the investment restrictions discussed, the Company also seeks to manage risk
by:
· not incurring debt over 20% of its NAV, calculated at time of
drawdown. The Company will target repayment of such debt within twelve months
of drawdown; and
· entering from time to time into hedging or other derivative
arrangements for the purposes of efficient portfolio management, managing
where appropriate, any exposure through its investments to currencies other
than Sterling.
For further details with respect to the processes for identifying, monitoring
and controlling risks to which the Company is exposed, see the Report of the
Risk Committee on pages 51 to 53.
Emerging Risks
Persistent Inflationary Pressures
While headline inflation has moderated globally, core inflation remains
sticky, especially for services, housing and workforce costs. In the US for
example, core inflation was around 3% for September 2025, with risks of
reacceleration due to tariffs and supply-side constraints.
High Global Debt
Public and private debt levels exceed 235% of global GDP, creating refinancing
risks as bond yields remain elevated. This is particularly acute in advanced
economies where restrictive monetary policies have raised debt servicing
costs.
Geopolitical Tensions and Trade Fragmentation
Ongoing conflicts, including in the Middle East, and renewed trade wars,
especially US vs China tech disputes, are increasing uncertainty. Export
controls and tariffs are driving structural shifts in global trade.
The ceasefire between Israel and Hamas, brokered in October, is fragile.
Sporadic Israeli airstrikes and Hamas attacks continue, undermining stability
and raising fears of renewed large-scale conflict.
Uneven Global Growth
Global GDP growth is forecast at ~2.5% for 2025, according to the IMF, but
there is stark regional divergence: the US remains resilient while the
Eurozone is stagnant.
ESG and Climate Change Risks and Considerations
The Board of Directors have carefully considered the impact of climate change
and ESG related risks on the Company's business strategy and the impact of the
Company's operations on the local community and environment. This analysis has
taken place at both the level of the Company and at the investment portfolio
level.
As an investment company with no employees, the Company itself has only a
minimal footprint on the local community and environment, but recognises that
everyone has a part to play in the reduction of adverse environmental impacts
and ensuring the company's operations have a positive impact on society and
the generation of long term sustainable value.
Further information on how the Board and CIP LLP manage the Company's ESG and
climate change related risks at the investment portfolio level can be found
within the Environmental, Social and Corporate Governance Report on pages 28
to 33. This includes the integration of ESG analysis into the investment
process.
Ongoing Charges
The ongoing charges figure for the year was 0.86% (2024: 0.72%). The ongoing
charges represent ongoing annual expenses of £7,537,392 (2024: £6,217,319)
divided by total average Net Asset Value for the year of £874,947,116 (2024:
£858,854,011). The ongoing charges have also been prepared in accordance with
the recommended methodology provided by the Association of Investment
Companies where finance costs of £7,848,961 (2024: £nil), investment sale
and purchase costs of £325,453 (2024: £33,564) and performance fees of £nil
(2024: £nil) have been excluded and represent the percentage reduction in
shareholder returns as a result of recurring operational expenses.
Investment Management and Administration
AIFM and Investment Advisory Agreement and Fees
The Directors are responsible for managing the business affairs of the Company
in accordance with the Articles of Incorporation and the investment policy and
have overall responsibility for the Company's activities including its
investment activities and reviewing the performance of the Company's
portfolio.
The Directors have, however, appointed G10 to perform delegated investment
management functions.
The Company entered into a tripartite agreement with G10 and CIP LLP, with
effect from 1 April 2024. G10 is the AIFM to the Company. CIP LLP is the
investment adviser to G10. CIP LLP is an appointed representative of G10,
which is authorised and regulated by the Financial Conduct Authority.
Administrator
IQ EQ has been appointed as Administrator and Company Secretary to the Company
pursuant to a master services agreement. The Administrator is responsible for
the maintenance of the books and financial accounts of the Company and the
calculation, in conjunction with the Investment Adviser, of the Net Asset
Value of the Company and the shares.
Depositary
The Depositary of the Company is Citibank UK Limited.
Corporate Governance Statement
The Corporate Governance Statement forms part of the Directors' Report.
Board Responsibilities
The Board comprises six non-executive Directors, who meet at least quarterly
to consider the affairs of the Company in a prescribed and structured manner.
All Directors are considered independent of the Investment Adviser for the
purposes of the AIC Code and Listing Rule 15.2.12A. Biographies of the
Directors for the year ended 30 September 2025 appear on pages 39 to 41 which
demonstrate the wide range of skills and experience they bring to the Board.
The Directors, in the furtherance of their duties, may take independent
professional advice at the Company's expense, which is in accordance with
principle 13 of the AIC Code. The Directors also have access to the advice and
services of the Company Secretary through its appointed representatives who
are responsible to the Board for ensuring that the Board's procedures are
followed, and that applicable rules and regulations are complied with.
To enable the Board to function effectively and allow the Directors to
discharge their responsibilities, full and timely access is given to all
relevant information.
The Directors are requested to confirm their continuing professional
development is up to date and any necessary training is identified during the
annual performance reviews carried out and recorded by the Remuneration and
Nomination Committee.
At each annual general meeting of the Company, each director shall retire from
office and each director may offer themselves for election or re-election by
the shareholders.
Conflicts of Interest
None of the Directors nor any persons connected with them had a material
interest in any of the Company's transactions, arrangements or agreements at
the date of this report and none of the Directors has or had any interest in
any transaction which is or was unusual in its nature or conditions or
significant to the business of the Company, and which was affected by the
Company during the reporting year.
At the date of this Annual Report, there are no outstanding loans or
guarantees between the Company and any Director.
Committees
The Company has established: the Audit Committee, the Remuneration and
Nomination Committee, the Risk Committee, Valuation Committee and the
Management Engagement Committee (together the "Committees"). Terms of
Reference for each committee is available on request from the Administrator
and on the Company's website
https://chrysalisinvestments.co.uk/investor-relations/
(https://chrysalisinvestments.co.uk/investor-relations/) .
The Audit Committee
Stephen Coe is the Chairman of the Audit Committee. A full report regarding
the Audit Committee can be found in the Audit Committee Report.
Remuneration and Nomination Committee
In accordance with the AIC Code, a Remuneration and Nomination Committee has
been established. Anne Ewing has been appointed as Chairman. The Remuneration
and Nomination Committee meets at least once a year in accordance with the
terms of reference and reviews, inter alia, the structure, size and
composition of the Board.
Details of the Directors' remuneration can be found in note 19 and page 48.
Management Engagement Committee
Margaret O'Connor has been appointed Chairman of the Management Engagement
Committee. The Management Engagement Committee will meet formally at least
once a year for the purpose, amongst other things, of reviewing the actions
and judgments of the Investment Adviser and the terms of the Portfolio
Management Agreement. Details of the management and performance fees can be
found in note 6.
Risk Committee
Simon Holden is the Chairman of the Risk Committee. A full report regarding
the Risk Committee can be found in the Risk Committee Report.
Valuation Committee
Lord Anthony Rockley is the Chairman of the Valuation Committee with Tim
Cruttenden, Diane Seymour-Williams and Jonathan Biggs as members.
Substantial Shareholdings
On 28 November 2025, the latest practicable date for disclosure in this Annual
Report, funds managed by Asset Value Investors held 17.6% of the share capital
of the Company. No other shareholder had a holding of greater than 10% of the
Company.
Shareholder Communication
The Company's main method of communication with shareholders is through its
published Half Yearly and Annual Reports which aim to provide shareholders
with a fair, balanced and understandable view of the Company's results and
objectives.
This is supplemented by the publication of the Company's quarterly net asset
values on its Ordinary Shares on the London Stock Exchange.
In line with principle 16 of the AIC Code, the Investment Adviser communicates
with both the Chairman and shareholders and is available to communicate and
meet with major shareholders. The Company has also appointed Panmure Liberum
Limited and Deutsche Numis to liaise with all major shareholders together with
the Investment Adviser, all of whom report back to the Board at quarterly
board meetings ensuring that the Board is fully aware of shareholder
sentiment, expectations and analyst views.
The Company's website, which is maintained by the Investment Adviser, is
regularly updated with news and announcements. Information published online is
accessible in many countries each with differing legal requirements relating
to the preparation and dissemination of financial information. Users of the
Company's website are responsible for informing themselves of how the
requirements in their own countries may differ from those of Guernsey.
Relations with Shareholders
All holders of Ordinary Shares in the Company have the right to receive notice
of, attend and vote at the general meetings of the Company.
At each general meeting of the Company, the Board and the Investment Adviser
are available to discuss issues affecting the Company.
Shareholders are additionally able to contact the Board directly outside of
meetings via the Company's dedicated e-mail address
(chrysalisgsyteam@iqeq.com) or by post via the Company Secretary.
Alternatively, shareholders are able to contact the Investment Adviser
directly (enquiries@chrysalisllp.co.uk) or the Senior Independent Director
(chrysalisgsyteam@iqeq.com) for issues they feel they may be unable to raise
directly with the Company itself.
The Company has adopted a zero-tolerance policy towards bribery and is
committed to carrying out business fairly, honestly and openly.
Stewardship Code
The Company is committed to the principles of the Financial Reporting
Council's UK Stewardship Code and this also constitutes the disclosure of that
commitment required under the rules of the FCA (Conduct of Business Rule
2.2.3).
Global Greenhouse Gas Emissions
The Company does not have any employees or physical offices, and most of its
operations are carried out by external service providers. Consequently, it is
not responsible for any additional emission sources under the Companies Act
2006 (Strategic Report and Directors' Reports) Regulations 2013.
For the same reason, the Company qualifies as a low-energy user under the
Streamlined Energy and Carbon Reporting ("SECR") framework and is therefore
exempt from the requirement to disclose energy consumption and carbon
emissions data.
Task Force for Climate-related Financial Disclosures ("TCFD")
Under the UK Listing Rules, the Company, as a closed-ended investment entity,
is not required to comply with the Task Force on Climate-related Financial
Disclosures ("TCFD") framework.
Although TCFD obligations do not currently apply to the Company itself, its
appointed Alternative Investment Fund Manager ("AIFM") must prepare a
climate-related financial disclosure report at the product level. This
requirement follows the Financial Conduct Authority's (FCA) ESG Sourcebook,
which incorporates rules and guidance aligned with TCFD recommendations. These
disclosures aim to provide institutional investors and other market
participants with information on climate-related risks and impacts associated
with the AIFM's TCFD-relevant activities. The product-level report can be
accessed on the Company's website.
Signed on behalf of the Board by:
Andrew Haining
Chairman
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and Audited
Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Audited Financial Statements for
each financial year. Under that law they are required to prepare the Audited
Financial Statements in accordance with International Financial Reporting
Standards as adopted by the EU and applicable law.
Under company law the Directors must not approve the Audited Financial
Statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Company and of its profit or loss for that year.
In preparing these Audited Financial Statements, the Directors are required
to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and estimates that are reasonable, relevant and
reliable;
· state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the Financial
Statements;
· assess the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and
· use the going concern basis of accounting unless they either
intend to liquidate the Company or to cease operations or have no realistic
alternative but to do so.
The Directors are responsible for keeping proper accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that its Financial Statements comply with the Companies
(Guernsey) Law, 2008. They are responsible for such internal control as they
determine is necessary to enable the preparation of Financial Statements that
are free from material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Company and to prevent and detect fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in Guernsey governing the preparation and dissemination of
Financial Statements may differ from legislation in other jurisdictions.
Disclosure of information to auditors
The Directors who held office at the date of approval of this Directors'
Report confirm that, so far as they are aware, there is no relevant audit
information of which the Company's Auditor is unaware; and that each Director
has taken all the steps that they ought to have taken as a director to make
themselves aware of any relevant audit information and to establish that the
Company's Auditor is aware of that information.
Responsibility statement of the Directors in respect of the Annual Report
We confirm that to the best of our knowledge:
· the Financial Statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company; and
· the Directors' Report (comprising the Chairman's Statement, the
Investment Adviser's Report, and Directors' Report) includes a fair review of
the development and performance of the business and the position of the
Company, together with a description of the principal risks and uncertainties
that it faces.
We consider the Annual Report and Audited Financial Statements, taken as a
whole, are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's position and performance,
business model and strategy.
Signed on behalf of the Board by:
Andrew Haining
Chairman
18 December 2025
Audit Committee Report
In accordance with the AIC Code, an Audit Committee has been established
consisting of Anne Ewing, Simon Holden, Margaret O'Connor and Stephen Coe, who
is the Chairman of the Audit Committee.
Membership and Role of the Committee
The Audit Committee meets at least twice a year and, when requested, provides
advice to the Board on whether the Annual Report and Audited Financial
Statements, taken as a whole, is fair, balanced and understandable and
provides information necessary for the shareholders to assess the Company's
performance, business model and strategy. The Audit Committee also reviews,
inter alia, the financial reporting process and the system of internal control
and management of financial risks, including understanding the current areas
of greatest financial risk and how these are managed by the Investment
Adviser, reviewing the Annual Report and Audited Financial Statements,
assessing the fairness of Audited Financial Statements and disclosures and
reviewing the external audit process. The Audit Committee is responsible for
overseeing the Company's relationship with the external auditor (the
"Auditor"), including making recommendations to the Board on the appointment
of the Auditor and their remuneration.
The Audit Committee considers the nature, scope and results of the Auditor's
work and reviews, and develops and implements a policy on the supply of any
non-audit services that are to be provided by the Auditor. The Audit Committee
annually reviews the independence and objectivity of the Auditor and considers
the appointment of an appropriate Auditor.
The continuation of the Auditor was considered and the Board subsequently
decided that the Auditor was sufficiently independent and was appropriately
appointed in order to carry out the audit of the Company For the year ended 30
September 2025. Appointment of the Auditor will be reviewed each year before
the AGM. The level of non-audit versus audit services is monitored. The table
below summarises the remuneration for services provided to the Company to KPMG
Channel Islands Limited ("KPMG") for audit and non-audit services during the
year ended 30 September 2025.
30 September 30 September
2025 2024
£'000 £'000
Annual audit fee 160 160
Interim review 52 52
212 212
Non-audit services provided in the year arose in connection with the review of
the Company's interim financial statements. Notwithstanding such services, the
Audit Committee considers KPMG to be independent of the Company and that the
provision of such non-audit services is not a threat to the objectivity and
independence of the conduct of the auditor as appropriate safeguards are in
place.
Internal Control
The Company is responsible for the process surrounding the valuation of its
investment portfolio. The Company has delegated these processes to its
independent Valuation Committee which reviews third party valuations of
unlisted investments. The Audit Committee liaises with the Valuation Committee
regularly and reviews minutes of Valuation Committee meetings. For all other
processes of the Company responsibility for internal control lies with
third-party service providers. These controls are monitored by the Board
reviewing and challenging reports from these service providers and through
segregation of duties between them.
The Audit Committee monitors the financial reporting process and tasks
undertaken in the production of the Annual Report and Audited Financial
Statements. The administration and company secretarial duties of the Company
are performed by IQ EQ.
Registrar duties are performed by Computershare Investor Services (Guernsey)
Limited.
The custody of financial assets is undertaken by Citibank UK Limited.
The Company does not have an internal audit department. All the Company's
management and administration functions are delegated to independent third
parties and it is therefore felt there is no need for the Company to have an
internal audit function. The Audit Committee have assessed the Company's
internal controls and found them to be satisfactory.
Fair Value Estimation
The valuation of the Company's investments is considered to be a significant
area of focus given that they represent the majority of the net assets of the
Company and in view of the significance of the estimates and judgments that
may be involved in the determination of their fair value. In discharging its
responsibilities, the Audit Committee has specifically considered the
valuation of investments as follows:
· Independent third-party valuation firms are engaged to provide
assistance, advice, assurance, and documentation in relation to the portfolio
valuations. Valuations are then submitted to the AIFM, Investment Adviser and
the Company's Valuation Committee for review. The Board reviews these
portfolio valuations on a regular basis throughout the year. The Audit
Committee's ultimate responsibility is to review the portfolio valuations.
· Reporting to the Board on the significant judgment made in the
preparation of the Company's Annual Report and Audited Financial Statements
and recommending valuations of the Company's investments to the Board.
· The Audit Committee will recommend the Board and or Independent
Valuation Committee engages independent valuers for specific assets where it
considers it appropriate.
External Audit
The Audit Committee will hold an annual meeting to approve the Company's
Annual Report and Audited Financial Statements before its publication. During
the current year the Audit Committee met with the Auditor to discuss the audit
plan and approach.
During this meeting it was agreed with the Auditor that the area of
significant audit focus related to the valuation of investments given that
they represent the majority of net assets of the Company and their valuation
involves significant judgement. The scope of the audit work in relation to
this asset class was discussed.
The Audit Committee reviews cash flow and working capital reports as part of
the review of annual and semi-annual financial statements, together with
taking into consideration significant events such as the continuation vote. At
the conclusion of the audit, the Audit Committee met with the Auditor and
discussed the scope of their annual audit work and their audit findings.
The Audit Committee reviews the scope and results of the audit, its cost
effectiveness, and the independence and objectivity of the Auditor. The Audit
Committee has particular regard to any non-audit work that the Auditor may
undertake and the terms under which the Auditor may be appointed to perform
non-audit services. In order to safeguard the Auditor's independence and
objectivity, the Audit Committee ensures that any other advisory and/or
consulting services provided by the Auditor does not conflict with their
statutory audit responsibilities.
To fulfil its responsibilities regarding the independence of the Auditor, the
Audit Committee considered:
· a report from the Auditor describing their arrangements to
identify, report and manage any conflicts of interest; and
· the extent of the non-audit services provided by the Auditor.
· To assess the effectiveness of the Auditor, the committee
reviewed:
· the Auditor's fulfilment of the agreed audit plan and variations
from it;
· the audit findings report highlighting any major issues that
arose during the course of the audit; and
· the effectiveness and independence of the Auditor having
considered the degree of diligence and professional scepticism demonstrated by
them.
The Audit Committee is satisfied with KPMG's effectiveness and independence as
Auditor.
During the year the Audit Committee met three time with all members present
(refer to Director Attendance on page 42).
Reappointment of auditor
On 1 October 2025, KPMG Channel Islands Limited changed its name to KPMG Audit
Limited.
The Auditor, KPMG Audit Limited, has expressed its willingness to continue in
office as Auditor. A resolution proposing their reappointment will be
submitted at the forthcoming general meeting to be held pursuant to section
199 of the Law.
Stephen Coe
Chairman of the Audit Committee, Chrysalis Investments Limited
Independent Auditor's Report to the Members of Chrysalis Investments Limited
Our opinion is unmodified
We have audited the financial statements of Chrysalis Investments
Limited (the "Company"), which comprise the statement of financial position
as at 30 September 2025, the statements of comprehensive income, changes in
equity and cash flows for the year then ended, and notes, comprising material
accounting policies and other explanatory information.
In our opinion, the accompanying financial statements:
· give a true and fair view of the financial position of the
Company as at 30 September 2025, and of the Company's financial performance
and cash flows for the year then ended;
· are prepared in accordance with International Financial
Reporting Standards as adopted by the EU ("IFRS"); and
· comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) ("ISAs (UK)") and applicable law. Our responsibilities are described
below. We have fulfilled our ethical responsibilities under, and are
independent of the Company in accordance with, UK ethical requirements
including the FRC Ethical Standard as required by the Crown Dependencies'
Audit Rules and Guidance. We believe that the audit evidence we have obtained
is a sufficient and appropriate basis for our opinion.
Key audit matters: our assessment of the risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were
of most significance in the audit of the financial statements and include the
most significant assessed risks of material misstatement (whether or not due
to fraud) identified by us, including those which had the greatest effect on:
the overall audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In arriving at our audit
opinion above, the key audit matter was as follows (unchanged from 2024):
The risk Our response
Valuation of unquoted investments held at fair value through profit or loss Basis: Our audit procedures included but were not limited to:
£701,088,000 (2024: £793,656,000) The Company's unquoted investments (the "Investments") are classified, Internal controls:
recognised and measured at fair value through profit or loss in accordance
Refer to the Audit Committee Report (pages 66-68 of the Annual Report), notes with IFRS 9. The Investments represent 80.2% (2024: 94.5%) of the Company's We evaluated the design and implementation of the control in place over the
2(h), 3, 10 and 18. net assets as at 30 September 2025. valuation of the Company's Investments.
The Company's Investments are valued by using recognised valuation We performed the procedures below rather than seeking to rely on the controls
methodologies and models, in accordance with the International Private Equity as the nature of the balance is such that we would expect to obtain audit
and Venture Capital Valuation ("IPEV") Guidelines, 2022. evidence primarily through the detailed procedures described.
The Company utilises an independent third-party valuation firm (the "Valuation Challenging management's assumptions and inputs including use of our KPMG
Agent") to assist and advise on their valuation process. valuation specialist:
Risk: · we held discussions with the Investment Adviser and Valuation Agent
and attended, in an observation capacity, a meeting of the Board of Directors
The valuation of the Company's Investments is a significant area of our audit, of the Company, to understand the valuation approach and the key judgements
given that it represents a significant portion of the net assets of the made;
Company.
· we assessed the scope of the services provided by the Valuation Agent
The valuation risk of the Investments incorporates a risk of error given the and read the valuation reports prepared by them to understand the specific
significance of estimates and judgements that may be involved in the methodologies and the valuation assumptions applied; and
determination of fair value.
· we assessed the objectivity, capability and competence of the
On the basis of the above we determined that the valuation of Investments have Valuation Agent.
a high degree of estimation uncertainty giving rise to a potential range of
reasonable outcomes greater than our materiality for the financial statements For a risk-based sample of Investments, with the support of our KPMG valuation
as a whole. The financial statements disclose in note 18 the sensitivities specialist, we critically assessed the valuations by:
estimated by the Company.
· assessing the reasonableness and appropriateness of the valuation
approach and methodology applied;
· challenging and corroborating the key assumptions used in the
valuations and, where possible, benchmarking these to observable market data;
· corroborating key investee company inputs used in the valuation
models and recent investment transactions to supporting documentation; and
· obtaining an understanding of how the impact of global economic
factors and the resultant uncertainty have been reflected in the valuation of
the Investments.
Assessing disclosures:
We also considered the Company's disclosures (see notes 3 and 18) in relation
to the use of estimates and judgements regarding the valuation of investments
and the Company's investment valuation policies adopted in note 2(h) and fair
value disclosures in note 18 for compliance with the relevant accounting
standards.
Our application of materiality and an overview of the scope of our audit
Materiality for the financial statements as a whole was set at £16,500,000,
determined with reference to a benchmark of net assets of £874,571,000, of
which it represents approximately 1.9% (2024: 2.0%).
In line with our audit methodology, our procedures on individual account
balances and disclosures were performed to a lower threshold, performance
materiality, so as to reduce to an acceptable level the risk that individually
immaterial misstatements in individual account balances add up to a material
amount across the financial statements as a whole. Performance materiality for
the Company was set at 75% (2024: 75%) of materiality for the financial
statements as a whole, which equates to £12,300,000. We applied this
percentage in our determination of performance materiality because we did not
identify any factors indicating an elevated level of risk.
We reported to the Audit Committee any corrected or uncorrected identified
misstatements exceeding £825,000, in addition to other identified
misstatements that warranted reporting on qualitative grounds.
Our audit of the Company was undertaken to the materiality level specified
above, which has informed our identification of significant risks of material
misstatement and the associated audit procedures performed in those areas as
detailed above.
Going concern
The directors have prepared the financial statements on the going concern
basis as they do not intend to liquidate the Company or to cease its
operations, and as they have concluded that the Company's financial position
means that this is realistic. They have also concluded that there are no
material uncertainties that could have cast significant doubt over its ability
to continue as a going concern for at least a year from the date of approval
of the financial statements (the "going concern period").
In our evaluation of the directors' conclusions, we considered the inherent
risks to the Company's business model and analysed how those risks might
affect the Company's financial resources or ability to continue operations
over the going concern period. The risks that we considered most likely to
affect the Company's financial resources or ability to continue operations
over this period were availability of capital to meet operating costs and
other financial commitments.
We considered whether these risks could plausibly affect the liquidity in the
going concern period by comparing severe, but plausible downside scenarios
that could arise from these risks individually and collectively against the
level of available financial resources indicated by the Company's financial
forecasts.
We considered whether the going concern disclosure in note 2 (b) to the
financial statements gives a full and accurate description of the directors'
assessment of going concern.
Our conclusions based on this work:
· we consider that the directors' use of the going concern basis of
accounting in the preparation of the financial statements is appropriate;
· we have not identified, and concur with the directors' assessment
that there is not, a material uncertainty related to events or conditions
that, individually or collectively, may cast significant doubt on the
Company's ability to continue as a going concern for the going concern period;
and
· we have nothing material to add or draw attention to in relation to
the directors' statement in the notes to the financial statements on the use
of the going concern basis of accounting with no material uncertainties that
may cast significant doubt over the Company's use of that basis for the going
concern period, and that statement is materially consistent with the financial
statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent with judgements
that were reasonable at the time they were made, the above conclusions are not
a guarantee that the Company will continue in operation.
Fraud and breaches of laws and regulations - ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud ("fraud risks") we
assessed events or conditions that could indicate an incentive or pressure to
commit fraud or provide an opportunity to commit fraud. Our risk assessment
procedures included:
· enquiring of management as to the Company's policies and procedures
to prevent and detect fraud as well as enquiring whether management have
knowledge of any actual, suspected or alleged fraud;
· reading minutes of meetings of those charged with governance; and
· using analytical procedures to identify any unusual or unexpected
relationships.
As required by auditing standards, and taking into account possible incentives
or pressures to misstate performance and our overall knowledge of the control
environment, we perform procedures to address the risk of management override
of controls, in particular the risk that management may be in a position to
make inappropriate accounting entries. On this audit we do not believe there
is a fraud risk related to revenue recognition because the Company's revenue
streams are simple in nature with respect to accounting policy choice, and are
easily verifiable to external data sources or agreements with little or no
requirement for estimation from management. We did not identify any additional
fraud risks.
We performed procedures including:
· identifying journal entries and other adjustments to test based on
risk criteria and comparing any identified entries to supporting
documentation; and
· incorporating an element of unpredictability in our audit procedures.
Identifying and responding to risks of material misstatement due to
non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected
to have a material effect on the financial statements from our sector
experience and through discussion with management (as required by auditing
standards), and from inspection of the Company's regulatory and legal
correspondence, if any, and discussed with management the policies and
procedures regarding compliance with laws and regulations. As the Company is
regulated, our assessment of risks involved gaining an understanding of the
control environment including the entity's procedures for complying with
regulatory requirements.
The Company is subject to laws and regulations that directly affect the
financial statements including financial reporting legislation and taxation
legislation and we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial statement
items.
The Company is subject to other laws and regulations where the consequences of
non-compliance could have a material effect on amounts or disclosures in the
financial statements, for instance through the imposition of fines or
litigation or impacts on the Company's ability to operate. We identified
financial services regulation as being the area most likely to have such an
effect, recognising the regulated nature of the Company's activities and its
legal form.
Auditing standards limit the required audit procedures to identify
non-compliance with these laws and regulations to enquiry of management and
inspection of regulatory and legal correspondence, if any. Therefore, if a
breach of operational regulations is not disclosed to us or evident from
relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or
regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk
that we may not have detected some material misstatements in the financial
statements, even though we have properly planned and performed our audit in
accordance with auditing standards. For example, the further removed
non-compliance with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely the inherently limited
procedures required by auditing standards would identify it.
In addition, as with any audit, there remains a higher risk of non-detection
of fraud, as this may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. Our audit procedures
are designed to detect material misstatement. We are not responsible for
preventing non-compliance or fraud and cannot be expected to detect
non-compliance with all laws and regulations.
Other information
The directors are responsible for the other information. The other
information comprises the information included in the annual report but does
not include the financial statements and our auditor's report thereon. Our
opinion on the financial statements does not cover the other information and
we do not express an audit opinion or any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Disclosures of emerging and principal risks and longer term viability
We are required to perform procedures to identify whether there is a material
inconsistency between the directors' disclosures in respect of emerging and
principal risks and the viability statement, and the financial statements
and our audit knowledge. We have nothing material to add or draw attention to
in relation to:
· the directors' confirmation within the Viability Statement (pages 55
and 56) that they have carried out a robust assessment of the emerging and
principal risks facing the Company, including those that would threaten its
business model, future performance, solvency or liquidity;
· the emerging and principal risks disclosures describing these risks
and explaining how they are being managed or mitigated;
· the directors' explanation in the Viability Statement (pages 55 and
56) as to how they have assessed the prospects of the Company, over what
period they have done so and why they consider that period to be appropriate,
and their statement as to whether they have a reasonable expectation that the
Company will be able to continue in operation and meet its liabilities as they
fall due over the period of their assessment, including any related
disclosures drawing attention to any necessary qualifications or assumptions.
We are also required to review the Viability Statement, set out on pages 55
and 56 under the Listing Rules. Based on the above procedures, we have
concluded that the above disclosures are materially consistent with the
financial statements and our audit knowledge.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material
inconsistency between the directors' corporate governance disclosures and the
financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is
materially consistent with the financial statements and our audit
knowledge:
· the directors' statement that they consider that the annual report
and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for shareholders to
assess the Company's position and performance, business model and strategy;
· the section of the annual report describing the work of the Audit
Committee, including the significant issues that the audit committee
considered in relation to the financial statements, and how these issues were
addressed; and
· the section of the annual report that describes the review of the
effectiveness of the Company's risk management and internal control systems.
We are required to review the part of Corporate Governance Statement relating
to the Company's compliance with the provisions of the UK Corporate Governance
Code specified by the Listing Rules for our review. We have nothing to report
in this respect.
We have nothing to report on other matters on which we are required to report
by exception
We have nothing to report in respect of the following matters where the
Companies (Guernsey) Law, 2008 requires us to report to you if, in our
opinion:
· the Company has not kept proper accounting records; or
· the financial statements are not in agreement with the accounting
records; or
· we have not received all the information and explanations, which to
the best of our knowledge and belief are necessary for the purpose of our
audit.
Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on pages 64 and 65,
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair view; such
internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due
to fraud or error; assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern; and
using the going concern basis of accounting unless they either intend to
liquidate the Company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue our opinion in an auditor's report. Reasonable
assurance is a high level of assurance, but does not guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC's website
at www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) .
The purpose of this report and restrictions on its use by persons other than
the Company's members as a body
This report is made solely to the Company's members, as a body, in accordance
with section 262 of the Companies (Guernsey) Law, 2008. Our audit work has
been undertaken so that we might state to the Company's members those matters
we are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members, as
a body, for our audit work, for this report, or for the opinions we have
formed.
Dermot Dempsey
For and on behalf of KPMG Audit Limited
Chartered Accountants and Recognised Auditors
Guernsey
18 December 2025
Statement of Comprehensive Income
For the year ended 30 September 2025
Year ended Year ended
30 September 2025 30 September 2024
Note Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investments
Net gains on investments held at fair value through
profit or loss 10 - 131,028 131,028 - 45,832 45,832
Net losses on currency movements - (1,537) (1,537) - (1,230) (1,230)
Net investment - 129,491 129,491 - 44,602 44,602
gains
Interest income 5 4,099 - 4,099 834 - 834
Other income 2,591 2,591 - - -
Total income 6,690 - 6,690 834 - 834
Advisory and management fees 6 (4,748) - (4,748) (2,987) - (2,987)
Other expenses 7 (3,115) - (3,115) (3,230) - (3,230)
Gains/(losses) before (1,173) 129,491 128,318 (5,383) 44,602 39,219
finance costs and taxation
Finance costs 14 (7,849) - (7,849) - - -
Gains/(losses) before taxation (9,022) 129,491 120,469 (5,383) 44,602 39,219
Tax expense - - - - - -
Total gains/(losses) and (9,022) 129,491 120,469 (5,383) 44,602 39,219
comprehensive gain/(loss)
for the year
Gain/(loss) per Ordinary Share (pence) 8 (1.65) 23.74 22.09 (0.90) 7.49 6.59
The total column of this statement represents the Statement of Comprehensive
Income of the Company prepared in accordance with International Financial
Reporting Standards as adopted by the European Union ("IFRS").
The supplementary revenue and capital return columns are prepared under
guidance published by the Association of Investment Companies ("AIC").
All items in the above statement derive from continuing operations.
The notes on pages 81 to 108 form an integral part of these Audited Financial
Statements.
Statement of Financial Position
As at 30 September 2025
2025 2024
Note £'000 £'000
Non-current assets
Investments held at fair value through profit or loss 10 819,449 795,671
Current assets
Cash and cash equivalents 11 118,118 44,612
Other receivables 12 9,415 1,376
127,533 45,988
Total assets 946,982 841,659
Current liabilities
Advisory and management fees payable (401) (385)
Other payables 13 (1,082) (943)
Loans and borrowings 14 (70,928) -
Total liabilities (72,411) (1,328)
Net assets 874,571 840,331
Equity
Share capital 15 774,424 860,653
Revenue reserve (42,618) (33,596)
Capital reserve 142,765 13,274
Total equity 874,571 840,331
Net asset value per Ordinary Share (pence) 16 171.65 141.26
Number of Ordinary Shares outstanding 15 509,499,538 594,892,952
Approved by the Board of Directors and authorised for issue on 18 December
2025 and signed on its behalf by:
Stephen Coe
Director
The notes on pages 81 to 108 form an integral part of these Audited Financial
Statements.
Statement of Changes in Equity
For the year ended 30 September 2025
2025 2024
Note £'000 £'000
Non-current assets
Investments held at fair value through profit or loss 10 819,449 795,671
Current assets
Cash and cash equivalents 11 118,118 44,612
Other receivables 12 9,415 1,376
127,533 45,988
Total assets 946,982 841,659
Current liabilities
Advisory and management fees payable (401) (385)
Other payables 13 (1,082) (943)
Loans and borrowings 14 (70,928) -
Total liabilities (72,411) (1,328)
Net assets 874,571 840,331
Equity
Share capital 15 774,424 860,653
Revenue reserve (42,618) (33,596)
Capital reserve 142,765 13,274
Total equity 874,571 840,331
Net asset value per Ordinary Share (pence) 16 171.65 141.26
Number of Ordinary Shares outstanding 15 509,499,538 594,892,952
The notes on pages 81 to 108 form an integral part of these Audited Financial
Statements.
Statement of Cash Flows
For the year ended 30 September 2025
2025 2024
Note £'000 £'000
Cash flows from operating activities
Cash used in operating activities 17 (6,756) (8,384)
Interest income received 4,134 731
Purchase of investments 10 (31,737) (23,421)
Sale of investments 10,12 130,731 53,029
Net losses on currency movements 1,537 1,230
Net cash generated from operating activities 97,909 23,185
Cash flows from financing activities
Proceeds from drawdown of loan facility 14 68,323 -
Loan interest paid 14 (5,244) -
Repurchase of shares (85,861) -
Net cash used in financing activities (22,782) -
Net increase in cash and cash equivalents 75,127 23,185
Cash and cash equivalents at the beginning of the year 44,612 22,626
Net losses on cash currency movements (1,621) (1,199)
Cash and cash equivalents at the end of the year 118,118 44,612
Cash and cash equivalents comprise of the following:
- Cash at bank 61,631 44,612
- Time deposits 15,000 -
- Exchange-traded funds 41,487 -
118,118 44,612
The notes on pages 81 to 108 form an integral part of these Audited Financial
Statements.
Notes to the Audited Financial Statements
For the year ended 30 September 2025
1. Reporting Entity
Chrysalis Investments Limited (the "Company") is a closed-ended investment
company, registered in Guernsey on 3 September 2018, with registered number
65432. The Company's registered office is PO Box 60, Fourth Floor, Plaza
House, Admiral Park, St Peter Port, Guernsey, GY1 4BF.
The Company is a Registered Closed-ended Collective Investment Scheme
regulated by the Guernsey Financial Services Commission ("GFSC"), with
reference number 2404263, pursuant to the Protection of Investors (Bailiwick
of Guernsey) Law 2020, as amended and the Registered Closed-ended Investment
Scheme Rules 2021.
The Company's 595,150,414 shares in issue, of which 85,650,876 are treasury
shares (refer to note 15), under ticker CHRY, SEDOL BGJYPP4 and ISIN
GG00BGJYPP46 have a listing on the Closed Ended Investment Fund segment and
are admitted to trading on the London Stock Exchange's Main Market for listed
securities. The Company invests in a diversified portfolio consisting
primarily of equity and equity-related securities issued by unquoted
companies.
G10 Capital Limited ("G10") is the AIFM to Chrysalis Investments Limited.
Chrysalis Investment Partners LLP ("CIP LLP") is the Investment Adviser to
G10. CIP LLP is an appointed representative of G10 which is authorised and
regulated by the Financial Conduct Authority. The administration of the
Company is delegated to IQ EQ Fund Services (Guernsey) Limited (the
"Administrator").
2. Material accounting policies
(a) Basis of accounting
The Audited Financial Statements have been prepared in compliance with
International Financial Reporting Standards as adopted by the European Union
("IFRS"). The Audited Financial Statements give a true and fair view and
comply with the Companies (Guernsey) Law, 2008.
Where presentational guidance set out in the Statement of Recommended Practice
("SORP") for investment companies issued by the Association of Investment
Companies ("AIC") updated in July 2022 is consistent with the requirements of
IFRS, the Directors have sought to prepare the Audited Financial Statements on
a basis compliant with the recommendations of the SORP.
(b) Going concern
The Directors have adopted the going concern basis in preparing the Audited
Financial Statements.
In assessing the going concern basis of accounting, the Directors have
considered the guidance issued by the Financial Reporting Council, the
Company's own financial position, the status of global financial markets,
various geopolitical events and conflicts, the current macroeconomic climate
and other uncertainties impacting on the Company's investments, their
financial position and liquidity requirements.
At the year end, the Company had liquidity including a current cash position
of £118,118,000 (2024: £44,612,000), a net current asset position of
£55,122,000 (2024: £44,660,000) and liquid listed investments amounting to
£118,361,000 (2024: £2,015,000); £115,256,000 of which is locked-up until
10 March 2026 (2024: £nil).
On 24 September 2024, the Company agreed a £70,000,000 debt facility with
Barclays Bank PLC which was fully drawn on 1 October 2024. Interest accrues at
a market-rate margin plus the daily SONIA rate. The facility matures on 30
September 2026. The facility was primarily drawn to cover the "buffer" element
of the Capital Allocation Policy (to fund follow on investment requirements
and working capital), allowing for proceeds from the sale of assets to cover
the share buyback. The CAP was predicated on a conservative liquidity plan and
proceeds from the sale of assets have been more substantial than originally
anticipated.
The Company generates liquidity by raising capital and from exiting
investments. It uses liquidity by making investments, paying company expenses
and making returns to shareholders. The Directors ensure it has adequate
liquidity by regularly reviewing its financial position and forward-looking
liquidity requirements. The Directors' going concern assessment includes
consideration of a range of likely downside scenarios which measure the impact
on the Company's liquidity of differing assumptions for portfolio valuation,
exits, new and follow-on investment requirements, capital raising and Company
expenses.
In assessing the going concern basis of accounting, the Directors have also
considered the proposals to maximise value and returns for shareholders,
exploring opportunities for realisations over a three-year time horizon.
Taking all matters into account, the Directors have a reasonable expectation
that the Company will continue in operational existence for at least twelve
months from the date of approval of the of the Annual Report and Audited
Financial Statement, and continue to adopt the going concern basis in
preparing them.
(c) Functional and presentational currency
The Audited Financial Statements of the Company are presented in the currency
of the primary economic environment in which it operates (its functional
currency). For the purpose of the Audited Financial Statements, the results
and financial position of the Company are presented in pound sterling ("£").
(d) Segmental reporting
The chief operating decision maker is the Board of Directors. The Directors
are of the opinion that the Company is engaged in a single segment of business
with the primary objective of investing in securities to generate capital
growth for shareholders. Consequently, no business segmental analysis is
provided.
The key measure of performance used by the Board is the Net Asset Value of the
Company (which is calculated under IFRS). Therefore, no reconciliation is
required between the measure of profit or loss used by the Board and that
contained in these Audited Financial Statements.
(e) Income
Interest income is accounted for on an effective interest rate basis and
recognised in profit or loss in the Statement of Comprehensive Income.
Interest income includes interest earned on convertible loan notes,
subordinated notes, cash held at bank on call or on deposit and cash assets
held as cash equivalents, including time deposits and exchange-traded funds.
(f) Expenses
Expenses are accounted for on an accruals basis. The Company's portfolio
management and administration fees, finance costs and all other expenses are
charged through the Statement of Comprehensive Income and are charged to
revenue. Performance fees are charged to capital in the Statement of
Comprehensive Income.
(g) Taxation
The Company has been granted exemption from liability to income tax in
Guernsey under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989
amended by the Director of Income Tax in Guernsey for the current year.
Exemption is applied and granted annually and subject to the payment of a fee,
currently £1,600 (2024: £1,600).
(h) Financial instruments
Initial recognition
The Company initially recognises transactions in financial instruments on the
trade date, which is the date on which the Company becomes party to the
contractual provisions of an instrument.
Classification and measurement of financial assets
On initial recognition, the Company classifies financial assets as measured at
amortised cost or at fair value through profit or loss ("FVTPL").
A financial asset is measured at amortised cost if it meets both of the
following conditions and is not designated as at FVTPL:
· It is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
· Its contractual terms give rise on specified dates to cash flows
that are Solely Payments of Principal and Interest ("SPPI").
All other financial assets of the Company are measured at FVTPL.
The classification depends on the entity's business model for managing the
financial assets and the contractual terms of the cash flows. At initial
recognition, the Company measures a financial asset at its fair value, plus,
in the case of a financial asset not at FVTPL, transaction costs that are
directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVTPL are expensed in the Statement of
Comprehensive Income.
Business model assessment
In assessing the objective of the business model in which a financial asset is
held, the Company considers all the relevant information about how the
business is managed, including:
· the documented investment strategy and the execution of this
strategy in practice. This includes whether the investment strategy focuses on
earning contractual interest income, maintaining a particular interest rate
profile, matching the duration of the financial assets to the duration of any
related liabilities or expected cash outflows or realising cash flows through
the sale of the assets;
· how the performance of the portfolio is evaluated and reported to
the Company's management;
· the risks that affect the performance of the business model (and
the financial assets held within that business model) and how those risks are
managed;
· how the investment manager is compensated: e.g. whether
compensation is based on the fair value of the assets managed or the
contractual cash flows collected; and
· the frequency, volume and timing of sales of financial assets in
prior periods, the reasons for such sales and expectations about future sales
activity.
Transfers of financial assets to third parties in transactions that do not
qualify for derecognition are not considered sales for this purpose,
consistent with the Company's continuing recognition of the assets.
The Company has determined that it has two business models:
· Held-to-collect business model: this includes cash and cash
equivalents, balances due from brokers and receivables from sale agreements.
These financial assets are held to collect contractual cash flows.
· Other business model: this includes debt securities, equity
investments, investments in unlisted open-ended investment funds, unlisted
private equities and derivatives. These financial assets are managed, and
their performance is evaluated, on a fair value basis. As such, an evaluation
on an SPPI basis is not required.
Assessment whether contractual cash flows are SPPI
For the purposes of this assessment, 'principal' is defined as the fair value
of the financial asset on initial recognition. 'Interest' is defined as
consideration for the time value of money and for the credit risk associated
with the principal amount outstanding during a particular period and for other
basic lending risks and costs (e.g. liquidity risk and administrative costs),
as well as a profit margin.
In assessing whether the contractual cash flows are SPPI, the Company
considers the contractual terms of the instrument. This includes assessing
whether the financial asset contains a contractual term that could change the
timing or amount of contractual cash flows such that it would not meet this
condition. In making this assessment, the Company considers:
· contingent events that would change the amount or timing of cash
flows;
· leverage features;
· prepayment and extension features;
· terms that limit the Company's claim to cash flows from specified
assets (e.g. non-recourse features); and
· features that modify consideration of the time value of money
(e.g. periodical reset of interest rates).
Subsequent measurement of financial assets
Financial assets at FVTPL: These assets are subsequently measured at fair
value. Net gains and losses, any interest or dividend income and expense, and
foreign exchange gains and losses are recognised in 'Net gains on investments
held at fair value through profit or loss' in the Statement of Comprehensive
Income.
Debt securities, equity investments, investments in unlisted open-ended
investment funds, unlisted private equities and derivative financial
instruments are included in this category.
Financial assets at amortised cost: These assets are subsequently measured at
amortised cost using the effective interest method. Interest income is
recognised in 'Interest income', foreign exchange gains and losses are
recognised in 'Net losses on currency movements' and impairment is recognised
in 'Impairment losses on financial instruments' in the Statement of
Comprehensive Income. Any gain or loss on derecognition is also recognised in
the Statement of Comprehensive Income.
Cash and cash equivalents, balances due on unsettled trades and receivables
from sale agreements are included in this category.
Fair value measurement
For investments actively traded in organised financial markets, fair value
will generally be determined by reference to Stock Exchange quoted market bid
prices at the close of business on the valuation date, without adjustment for
transaction costs necessary to realise the asset.
In respect of unquoted instruments, including associates, or where the market
for a financial instrument is not active, fair value is established by using
recognised valuation methodologies, in accordance with International Private
Equity and Venture Capital Valuation ("IPEV") Guidelines, revised December
2022.
The Company has adopted a valuation policy for unquoted securities to provide
an objective, consistent and transparent basis for estimating the fair value
of unquoted equity securities in accordance with IFRS as well as the IPEV
Guidelines.
The unquoted securities valuation policy and the associated valuation
procedures are subject to review on a regular basis, and updated as
appropriate, in line with industry best practice. In addition, the Company
works with independent third-party valuation firms, to obtain assistance,
advice, assurance, and documentation in relation to the ongoing valuation
process.
The Company considers it impractical to perform an in-depth valuation analysis
for every unquoted investment on a daily basis (whether internally or with the
assistance of an independent third party). Therefore, it is expected that an
in- depth valuation of each investment will be performed independently by an
independent third-party valuation firm: (i) on a quarterly basis; and (ii)
where the Company, in conjunction with its advisors, determines that a
Triggering Event has occurred.
A "Triggering Event" may include any of the following:
· a subsequent round of financing (whether pro rata or otherwise)
by the relevant investee company;
· a significant or material milestone achieved by the relevant
investee company;
· a secondary transaction involving the relevant investee company
on which sufficient information is available;
· a change in the makeup of the management of the relevant investee
company;
· a material change in the recent financial performance or expected
future financial performance of the relevant investee company;
· a material change in the market environment in which the relevant
investee company operates; or
· a significant movement in market indices or economic indicators.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The change in fair value is recognised in profit or loss
and is presented within the 'Net gains on investments held at fair value
through profit or loss' in the Statement of Comprehensive Income.
IFRS requires the Company to measure fair value using the following fair value
hierarchy that reflects the significance of the inputs used in making the
measurements. IFRS establishes a fair value hierarchy that prioritises the
inputs to valuation techniques used to measure fair value. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (Level 1 measurements) and the lowest priority
to unobservable inputs (Level 3 measurements).
The three levels of fair value hierarchy under IFRS are as follows:
· Level 1 reflects financial instruments quoted in an active
market.
· Level 2 reflects financial instruments whose fair value is
evidenced by comparison with other observable current market transactions in
the same instrument or based on a valuation technique whose variables include
only data from observable markets.
· Level 3 reflects financial instruments whose fair value is
determined in whole or in part using a valuation technique based on
assumptions that are not supported by prices from observable market
transactions in the same instrument and not based on available observable
market data. For investments that are recognised in the Audited Financial
Statements on a recurring basis, the Company determines whether transfers have
occurred between levels in the hierarchy by reassessing the categorisation
(based on the lowest significant input) at the date of the event that caused
the transfer.
Derecognition of financial assets
A financial asset (in whole or in part) is derecognised either (i) when the
Company has transferred substantially all the risks and rewards of ownership;
or (ii) when it has neither transferred nor retained substantially all the
risks and rewards and when it no longer has control over the assets or a
portion of the asset; or (iii) when the contractual right to receive cash flow
has expired. The derecognised investments are measured at the weighted average
method. Any gain or loss on derecognition is recognised in the 'Net gains on
investments held at fair value through profit or loss' in the Statement of
Comprehensive Income.
Classification and subsequent measurement of financial liabilities
Financial liabilities are classified as measured at amortised cost or FVTPL.
A financial liability is classified as at FVTPL if it is classified as
held-for-trading, it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured at fair value and net
gains or losses, including any interest, are recognised in the Statement of
Comprehensive Income.
Other financial liabilities are subsequently measured at amortised cost using
the effective interest method. Interest expense and foreign exchange gains and
losses are recognised in the Statement of Comprehensive Income.
Any gain or loss on derecognition is also recognised in the Statement of
Comprehensive Income.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the
Company's obligations are discharged, cancelled or they expire.
(i) Cash and cash equivalents
Cash and cash equivalents include cash at bank and short-term, highly liquid
investments that are readily convertible to known amounts of cash and are
subject to an insignificant risk of change in value. Time deposits included in
cash equivalents have original maturities of three months or less.
Exchange-traded funds are also considered cash equivalents due to their highly
liquid nature and cash-like returns. The risk of valuation changes in
exchange-traded funds is managed via a total return swap at the level of the
exchange-traded fund.
Cash and cash equivalents are carried at amortised cost in the Statement of
Financial Position.
(j) Other receivables
Other receivables do not carry interest and are short-term in nature and are
accordingly recognised at amortised cost.
(k) Foreign currency
Transactions and balances
At each Statement of Financial Position date, monetary assets and liabilities
that are denominated in foreign currencies are translated at the rates
prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign
currencies are translated at the rates prevailing at the date fair value is
measured. Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the year in which
they arise. Transactions denominated in foreign currencies are translated into
pound sterling (£) at the rate of exchange ruling at the date of the
transaction.
Foreign exchange gains and losses arising from translation are included in the
Statement of Comprehensive Income.
Where foreign currency items are held at fair value, the foreign currency
movements are presented as part of the fair value change.
(l) Treasury shares
When shares recognised as equity are repurchased, the amount of the
consideration paid, which includes directly attributable costs, is recognised
as a deduction from equity. Repurchased shares are classified as treasury
shares and are presented as treasury shares. When treasury shares are sold
or reissued subsequently, the amount received is recognised as an increase in
equity and the resulting surplus or deficit in the transaction is presented
within share premium.
(m) Capital reserve
Profits achieved by selling investments and changes in fair value arising upon
the revaluation of investments that remain in the portfolio are all charged to
Capital in the Statement of Comprehensive Income and allocated to the Capital
reserve. The Capital reserve is also used to fund dividend distributions.
(n) Revenue reserve
The balance of all items allocated to Revenue in the Statement of
Comprehensive Income for the year is transferred to the Company's Revenue
reserve.
(o) Investment entities
In accordance with IFRS 10 Consolidated Financial Statements an investment
entity is an entity that:
· obtains funds from one or more investors for the purpose of
providing those investor(s) with investment management services;
· commits to its investor(s) that its business purpose is to invest
funds solely for returns from capital application, investment income, or both;
and
· measures and evaluates the performance of substantially all of
its investments on a fair value basis.
The Directors are satisfied that the Company meets each of these criteria and
hence is an investment entity in accordance with IFRS 10 Consolidated
Financial Statements.
3. Use of estimates and critical judgements
The preparation of Audited Financial Statements in accordance with IFRS
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the Audited Financial Statements and the reported
amounts of income and expenses during the year. Actual results could differ
from those estimates and assumptions.
The estimates and underlying assumptions are reviewed on an ongoing basis.
There were no significant accounting estimates or significant judgements in
the current year, except for the use of estimates in the valuation of the
unquoted investments detailed in note 18 and continued treatment of the
Company as an Investment Entity under IFRS 10 Consolidated Financial
Statements, detailed in note 2(o).
4. Changes in material accounting policies
Effective from 1 October 2024
The Company adopted the following accounting standards and their amendments
with effect from 1 October 2024, with no material impact on the Audited
Financial Statements:
Non-current Liabilities with Covenants and Classification of Liabilities as
Current or Non-current (Amendments to IAS 1 Presentation of Financial
Statements)
The amendments aim to promote consistency in applying the requirements by
helping companies determine whether, in the Statement of Financial Position,
debt and other liabilities with an uncertain settlement date should be
classified as current (due or potentially due to be settled within one year)
or non-current.
New and revised standards
The following accounting standards and their amendments were in issue at the
year end but will not be in effect until after this financial year end. The
Directors have considered their impact and have concluded that, with the
exception of IFRS 18 Presentation and Disclosure in Financial Statements as
detailed overleaf, they will not have a significant impact on the Audited
Financial Statements.
Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in
Foreign Exchange Rates)
(Effective for reporting periods beginning on or after 1 January 2025)
The amendments require an entity to apply a consistent approach to assessing
whether a currency is exchangeable into another currency and, when it is not,
to determining the exchange rate to use and the disclosures to provide.
Amendments to the Classification and Measurement of Financial Instruments
(Effective for reporting periods beginning on or after 1 January 2026)
The amendments, summarised here, apply to IFRS 9 Financial Instruments and
IFRS 7 Financial Instruments: Disclosures:
· Amended guidance permits an entity to elect to discharge a
financial liability, that will be settled in cash using an electronic payment
system, before the settlement date if specific criteria are met.
· Enhanced guidance is provided on the classification of financial
assets with ESG-linked features.
· Additional disclosures are required for financial instruments
with contingent features.
Annual Improvements to IFRS Accounting Standards-Volume 11
(Effective for reporting periods beginning on or after 1 January 2026)
The pronouncement includes clarifying amendments to wording and referencing
updates in IFRS 1 First-time Adoption of International Financial Reporting
Standards, IFRS 7 Financial Instruments: Disclosures, IFRS 9 Financial
Instruments, IFRS 10 Consolidated Financial Statements, and IAS 7 Statement of
Cash Flows.
IFRS 18 Presentation and Disclosure in Financial Statements
(Effective for reporting periods beginning on or after 1 January 2027, subject
to adoption by the European Financial Reporting Advisory Group)
IFRS 18 Presentation and Disclosure in Financial Statements will replace IAS 1
Presentation of Financial Statements. The new standard introduces the
following key new requirements:
· Entities are required to classify all income and expenses into
five categories in the Statement of Comprehensive Income, namely the
operating, investing, financing, discontinued operations and income tax
categories. Entities are also required to present a newly-defined operating
profit subtotal. Entities' net profit will not change.
· Management-defined performance measures ("MPMs") are disclosed in
a single note in the Audited Financial Statements.
· Enhanced guidance is provided on how to group information in the
Audited Financial Statements.
· In addition, all entities are required to use the operating
profit subtotal as the starting point for the Statement of Cash Flows when
presenting operating cash flows under the indirect method.
The Company is still in the process of assessing the impact of the new
standard, particularly with respect to the structure of the Company's
Statement of Comprehensive Income, the Statement of Cash Flows and the
additional disclosures required for MPMs. The Company is also assessing the
impact on how information is grouped in Audited Financial Statements,
including for items currently labelled as 'other'.
There are no other standards, amendments to standards or interpretations that
are effective for annual periods beginning on 1 October 2024 that have a
material effect on the financial statements of the Company, apart from those
already disclosed.
5. Interest income
2025 2024
£'000 £'000
Interest and gains on assets held at amortised cost:
Cash at bank 1,361 474
Time deposits 1,440 -
Exchange-traded funds 1,298 -
UK treasury bills - 360
4,099 834
6. Advisory and management fees
2025 2024
£'000 £'000
Jupiter Investment Management Limited ("JIML") - 618
Chrysalis Investment Partners LLP ("CIP LLP") 4,748 2,369
Total advisory and management fees 4,748 2,987
From 1 October 2023 to 31 March 2024, the Company procured portfolio
management services from JIML, under a Portfolio Management Agreement dated 1
July 2022. On 29 January 2024, the Company entered into an AIFM and Investment
Advisory Agreement with G10 and CIP LLP respectively. Under this agreement,
with effect from 1 April 2024, G10 was appointed as the AIFM to the Company
and CIP LLP became Investment Adviser to G10. CIP LLP is an appointed
representative of G10 which is authorised and regulated by the Financial
Conduct Authority.
The Company paid a monthly "Management Fee" to JIML, equal to 1/12 of 0.5% of
the Net Asset Value up to 30 September 2023. As part of the changes to
investment management arrangements, the Company agreed a reduction to the
Management Fee, effective from 1 October 2023 to 31 March 2024, from 0.5% to
0.15%, leading to a saving in the Management Fee over the period.
From 1 April 2024 the Company pays an "Advisory and AIFM Fee" to CIP LLP,
equal to the sum of (a) 1/12 of 0.5% of the Net Asset Value per month; and (b)
1/12 of 5bps of the Net Asset Value per annum on the first £1,000,000,000 of
the Net Asset Value and then 3bps of the Net Asset Value per annum thereafter,
such amount to be calculated and paid monthly in arrears.
Management Fees (for the period from 1 October 2023 to 31 March 2024) and
Advisory Fees (for the period from 1 April 2024 to 30 September 2025) are
charged to Revenue in the Statement of Comprehensive Income.
Performance fee
To 31 March 2024, the performance fee payable was the sum of which is equal to
20% of the amount by which the Adjusted Net Asset Value at the end of a
Calculation Period exceeds the higher of: (i) the Performance Hurdle; and (ii)
the High Water Mark (the "Performance Fee").
At an Extraordinary General meeting that took place on 15 March 2024, new
Performance Fee terms were approved. The revised Performance Fee, effective
from 1 April 2024, is the sum of which shall be equal to 12.5 per cent of the
amount by which the Adjusted Net Asset Value at the end of a Calculation
Period exceeds the higher of: (i) the Performance Hurdle; and (ii) the High
Water Mark. The last Performance Fee was payable for the period ended 30
September 2021, at which time the NAV per share was 251.96 pence (2024: 141.26
pence). A full definition of the terms of the new Performance Fee can be found
in the Key Documents section of the Investor Relations page on the Company's
website.
Performance Fees are ordinarily charged to Capital in the Statement of
Comprehensive Income.
As at 30 September 2025, the Company had not exceeded the High Water Mark and
Performance Hurdle therefore no accrual (30 September 2024: £nil) for
performance fees has been charged within these Audited Financial Statements.
7. Other expenses
2025 2024
£'000 £'000
Administration fee 223 260
Auditor's remuneration for:
- audit fees (current year) 160 160
- audit fees (under/(over) accrual in prior year) - (16)
- non-audit fees 52 52
Committee fees 126 158
Depositary fees 70 69
Directors' expenses 7 12
Directors' fees 478 398
Directors' liability insurance 41 59
FCA fees 29 23
Legal and professional fees:
- ongoing operations 912 1,363
- valuation fees 330 350
- fees relating to the sale and purchase of investments 325 34
Listing fees 21 24
Design fees 45 38
Registrars' fees 41 35
Secretarial fees 80 51
Sundry 175 160
3,115 3,230
8. Gain per Ordinary Share
30 September 2025 30 September 2024
Net return Per share Net return Per share
£'000 pence £'000 pence
Revenue return (9,022) (1.65) (5,383) (0.90)
Capital return 129,491 23.74 44,602 7.49
120,469 22.09 39,219 6.59
Weighted average number of Ordinary Shares 545,436,373 595,149,710
The return per share is calculated using the daily weighted average number of
Ordinary Shares outstanding.
9. Dividends
The Board has not declared a dividend (2024: £nil).
10. Investments held at fair value through profit or loss
2025 2024
£'000 £'000
Opening book cost 656,080 732,033
Opening investment holding unrealised gains 139,591 48,343
Opening valuation 795,671 780,376
Movements during the year:
Purchases at cost 31,793 23,421
Sale of investments (139,043) (53,958)
Net gains on investments held at fair value 131,028 45,832
Closing valuation 819,449 795,671
Closing book cost 607,445 656,080
Closing investment holding unrealised gains 212,004 139,591
Closing valuation 819,449 795,671
Movement in unrealised gains during the year 265,625 339,125
Movement in unrealised losses during the year (193,212) (247,877)
Realised gain on sale of investments 65,596 7,014
Realised loss on sale of investments (6,981) (52,430)
Net gains on investments held at fair value through profit or loss 131,028 45,832
The Company holds all its investments at FVTPL. Investments held by the
Company on 30 September 2025 where the ownership interest exceeded 20% were as
follows:
Principal place of business Ownership interest %
Name Principal activity
Rowanmoor Group Limited United Kingdom In wind down 20-30%
Tactus Holdings Limited United Kingdom In administration 20-30%
11. Cash and cash equivalents
2025 2024
£'000 £'000
Cash and cash equivalents comprise of the following:
Cash at bank 61,631 44,612
Time deposits 15,000 -
Exchange-traded funds 41,487 -
118,118 44,612
12. Other receivables
2025 2024
£'000 £'000
Other receivables 9,415 1,376
9,415 1,376
Featurespace Limited was disposed prior to 30 September 2025. The Company
anticipates receiving further proceeds from the sale of Featurespace. These
amounts, which total £9,249,000, are included within 'Other receivables' as
at 30 September 2025 (30 September 2024: £902,000 from the sale of
Graphcore).
13. Other payables 2025 2024
£'000 £'000
Administration fees 25 28
Audit fees 160 160
Legal fees 5 382
Valuation fees 191 17
Custodian fees 18 23
Amounts due in respect of shares repurchased 605 237
Other creditors 78 96
1,082 943
14. Loans and borrowings
2025 2024
£'000 £'000
Opening balance - -
Loan principal drawn 70,000 -
Less: arrangement fees paid (1,677) -
Proceeds from drawdown of loan facility 68,323 -
Finance costs 7,849 -
Less: loan interest paid (5,244) -
Closing balance 70,928 -
On 24 September 2024, the Company agreed a £70,000,000 debt facility with
Barclays Bank PLC which was fully drawn on 1 October 2024. Interest accrues at
a market-rate margin plus the daily SONIA rate. The facility matures on 30
September 2026. The purpose of the facility is to cover the Company's working
capital requirements and potential follow-on investments.
Finance costs include arrangement fees and loan interest recognised using the
effective interest method.
The loan facility is secured against a selection of portfolio assets,
comprising both listed and unlisted holdings.
It is subject to covenant tests relating to:
- Loan-to-Value Ratio
- Minimum Number of Eligible Investments
- Company Share Price
All terms of the facility are consistent with prevailing market standards. The
Company was compliant with the covenants at year end.
15. Share capital
Number of Ordinary Shares
Issued Treasury Total Outstanding
Ordinary Shares of no par value
At 1 October 2023 595,150,414 - 595,150,414
Repurchase of shares - (257,462) (257,462)
At 30 September 2024 595,150,414 (257,462) 594,892,952
Repurchase of shares - (85,393,414) (85,393,414)
At 30 September 2025 595,150,414 (85,650,876) 509,499,538
Share capital
Issued Treasury Total
£'000 £'000 £'000
Ordinary Shares of no par value
At 1 October 2023 860,890 - 860,890
Repurchase of shares - (236) (236)
Share repurchase costs - (1) (1)
At 30 September 2024 860,890 (237) 860,653
Repurchase of shares - (86,100) (86,100)
Share repurchase costs - (129) (129)
At 30 September 2025 860,890 (86,466) 774,424
The holders of Ordinary Shares have the right to receive notice of and attend,
speak and vote in general meetings of the Company. They are also entitled to
participate in any dividends and other distributions of the Company.
On 26 September 2024, the Company announced a Share Buyback Programme (the
"Programme") in accordance with its Capital Allocation Policy. The Programme
permits the buyback of shares up to £100 million and thereafter at least 25%
of net realised gains on asset sales. At 30 September 2025, the Company had
bought back 85,650,876 shares (2024: 257,462) for a total consideration of
£86.5 million (2024: £0.2 million).
The purpose of the Programme is to return capital to shareholders while also
accreting net asset value per share for the benefit of long-term shareholders.
The Company has engaged its Corporate Brokers to implement the Programme on
its behalf.
Treasury shares do not have any rights with respect to receiving dividends or
voting at shareholder meetings.
16. Net asset value per Ordinary Share
The Net Asset Value per Ordinary Share and the Net Asset Value at the year end
calculated in accordance with the Articles of Incorporation were as follows:
30 September 2025 30 September 2024
NAV NAV NAV NAV
per share attributable per share attributable
pence £'000 pence £'000
Ordinary Shares: basic and diluted 171.65 874,571 141.26 840,331
The Net Asset Value per Ordinary Share is based on 509,499,538 (2024:
594,892,952) Ordinary Shares, being the number of Ordinary Shares outstanding
at the year end.
17. Cash used in operating activities
2025 2024
£'000 £'000
Total gains for the year 120,469 39,219
Net gains on investments held at fair value through profit or loss (131,028) (45,832)
Interest income (4,099) (834)
Finance costs 7,849 -
Net losses on currency movements attributable to working capital (7) (4)
Movement in working capital
Decrease/(increase) in other receivables (excluding interest 9 (321)
receivable, deferred finance costs, and deferred consideration receivable)
Increase/(decrease) in payables (excluding accrued finance costs 51 (612)
and amounts due in respect of shares repurchased)
(6,756) (8,384)
18. Financial instruments and capital disclosures
The Company's activities expose it to a variety of financial risks; market
risk (including other price risk, foreign currency risk and interest rate
risk), credit risk and liquidity risk.
Certain financial assets and financial liabilities of the Company are carried
in the Statement of Financial Position at their fair value. The fair value is
the amount at which the asset could be sold, or the liability transferred in a
current transaction between market participants, other than a forced or
liquidation sale. For investments actively traded in organised financial
markets, fair value is generally determined by reference to Stock Exchange
quoted market mid prices and Stock Exchange Electronic Trading Services
("SETS") at last trade price at the year end date, without adjustment for
transaction costs necessary to realise the asset. Other financial instruments
not carried at fair value are typically short-term in nature and reprice to
the current market rates frequently. Accordingly, their carrying amount is a
reasonable approximation of fair value. This includes cash and cash
equivalents, other receivables and payables.
The Company measures fair values using the following hierarchy that reflects
the significance of the inputs used in making the measurements. Categorisation
within the hierarchy has been determined on the basis of the lowest level
input that is significant to the fair value measurement of the relevant assets
as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or
liabilities.
An active market is a market in which transactions for the asset or liability
occur with sufficient frequency and volume on an ongoing basis such that
quoted prices reflect prices at which an orderly transaction would take place
between market participants at the measurement date. Quoted prices provided by
external pricing services, brokers and vendors are included in Level 1, if
they reflect actual and regularly occurring market transactions on an
arm's-length basis.
Level 2 - Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices).
Level 2 inputs include the following:
· quoted prices for similar (i.e. not identical) assets in active
markets;
· quoted prices for identical or similar assets or liabilities in
markets that are not active. Characteristics of an inactive market include a
significant decline in the volume and level of trading activity, the available
prices vary significantly over time or among market participants or the prices
are not current;
· inputs other than quoted prices that are observable for the asset
(for example, interest rates and yield curves observable at commonly quoted
intervals); and
· inputs that are derived principally from, or corroborated by,
observable market data by correlation or other means (market-corroborated
inputs).
Level 3 - Inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement in its entirety. If a
fair value measurement uses observable inputs that require significant
adjustment based on unobservable inputs, that measurement is a Level 3
measurement. Assessing the significance of a particular input to the fair
value measurement in its entirety requires judgement, considering factors
specific to the asset or liability.
At 30 September 2025 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Quoted equity 118,361 - - 118,361
Unquoted equity - - 701,088 701,088
118,361 - 701,088 819,449
At 30 September 2024 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Quoted equity 2,015 - - 2,015
Unquoted equity - - 793,656 793,656
2,015 - 793,656 795,671
The following table shows the valuation techniques used for Level 3 fair
values, as well as the significant unobservable inputs used for Level 3 items:
Unlisted Investments 2025
Valuation Technique Fair Value as at 30 September 2025 (£000s) Significant Unobservable Inputs Weighted Average Range Method or Unobservable Inputs Utilised Sensitivity % Sensitivity to changes in significant unobservable input (£000s)
Market approach using comparable trading multiples 700,772 EV/LTM Revenue Multiple 3.87x 1.33x - 6.68x 1/2/3/4/5/6 +/- 25% +17,029 / -17,015
EV/2025E Revenue Multiple 4.15x 1.66x - 7.23x 1/2/3/4/5/6 +/- 25% +35,774 / -88,690
EV/2026E Revenue Multiple 6.42x 6.14x - 7.47x 1/2/3/4/5/7 +/- 25% +4,449 / -18,100
EV/2027E Revenue Multiple 6.23x No range 1/2/3/4/5/8 +/- 25% +7,872 / -7,827
EV/LTM Earnings Multiple 14.51x No range 1/2/3/4/5/6 +/- 25% +2,805 / -2,804
EV/2025E Earnings Multiple 18.83x No range 1/2/3/4/5/6 +/- 25% +30,326 / -30,151
EV/Book Value 2025E Multiple 2.72x No range 1/2/3/4/5/6 +/- 25% +30,528 / -30,352
Illiquidity Discount 10.0% No range 5 +/- 25% +137,489 / -174,571
Expected Proceeds 316 Execution Discount 0.0% 0.0% - 25.0% 7 +/- 25% +0 / -79
Valuation Technique
The Company has adopted a valuation policy for unquoted securities that
provides an objective, consistent and transparent basis for estimating the
fair value of unquoted equity securities in accordance with IFRS and the IPEV
Guidelines, revised December 2022.
IFRS requires the Company to measure fair value using a fair value hierarchy
that reflects the significance of the inputs used in making the measurements.
IFRS establishes a fair value hierarchy that prioritises the inputs to
valuation techniques used to measure fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements).
Level 3 reflects financial instruments whose fair value is determined in whole
or in part using a valuation technique based on assumptions that are not
supported by prices from observable market transactions in the same instrument
or based on available observable market data. These are known as unobservable
inputs.
When valuing an asset the independent valuer is required to select the
valuation technique most appropriate for that asset, selecting the appropriate
unobservable inputs.
Unobservable Inputs
1. Trading Multiples
Trading multiples are financial ratios that allow an asset to be valued by
reference to various financial metrics, including revenue, earnings and book
value. The nature and stage of development of the asset will help to determine
the appropriate metric(s) to use. Revenue will generally be used until such a
time an asset is delivering sustainable earnings. Industry specific metrics
may also be used for specific assets. One or more trading multiples may be
used and an average taken when arriving at the final valuation.
2. Actual and Estimated Financial Metrics
When applying a trading multiple the independent valuer will generally utilise
the most recently available financial metrics, looking back over the last
twelve months for income statement metrics, or at the latest balance sheet
date for balance sheet metrics. Where estimated financial metrics are deemed
reliable these may also be used. Pro forma financial metrics may be used where
acquisitions and disposals have occurred. The impact of one-time revenue or
earnings events may also be removed from actual or estimated financial
metrics.
3. Comparable Companies
In order to calculate a trading multiple a set of comparable companies must be
identified. These companies will usually be listed companies with publicly
available financial information. When identifying comparable companies the
independent valuer will usually select those offering similar products or
services, to the same type of customers. The number of comparable companies
selected will vary depending on the number of similar companies in the
available universe. The set of comparable companies will change from time to
time depending on the evolution of the asset and the companies considered
comparable. Outliers which skew a trading multiple may be removed from the
set.
4. Net Cash/(Debt)
Net cash/(debt) will be added/(deducted) to/(from) the enterprise value of an
asset, when arriving at the equity value of that asset.
5. Valuation Premiums/Discounts
Where a recent investment transaction has taken place for a specific asset
which allows for the calculation of an implied valuation, subsequent
valuations will be calibrated to the implied valuation resulting in an implied
premium or discount to that recent transaction. This premium or discount may
be reduced over time or as company performance evolves. If a calibrated
approach is no longer deemed appropriate, an illiquidity discount will be
applied. The independent valuer will use their knowledge of private markets to
determine the appropriate illiquidity discount.
6. Anticipated Exit Route
The nature of an exit for an unquoted asset, for example by way of IPO, trade
sale or liquidation, may often determine differing proceeds for the Company.
Where an exit route is known with virtual certainty then the expected proceeds
will be calculated based on the expected exit route. Where a valuation is
deeply discounted and there is a real risk the asset may fall into
administration the expected proceeds will be calculated based on a
liquidation. If an asset is valued below cost and the Company has a preferred
return, that preferred return will be applied. If an asset is valued above
cost and the Company's preferred return would deliver an enhanced return, the
preferred return will be applied. If an asset is valued significantly above
cost and an investor with a preferred return would benefit from a conversion
to ordinary shares, a conversion will be assumed.
7. Execution Discount
When the full or partial disposal of an asset has been negotiated and a price
set, but the transaction has not yet closed, the valuation of the asset may be
adjusted to take into account any uncertainty associated with the pending
transaction. The value of the execution discount will vary depending on the
conditions which need to be met before the transaction closes and the expected
timing of the close.
8. Likelihood of insolvency
When insolvency becomes a potential outcome for an investment then the valuer
may assume that it will not return any value. A probability is usually
assigned to a zero value scenario in the form of a percentage. The percentage
assigned to a zero value scenario may increase or decrease over time depending
on whether insolvency is deemed to be more or less likely at each valuation
point.
The following table shows the valuation techniques used for Level 3 fair
values, as well as the significant unobservable inputs used for Level 3 items:
Unlisted Investments 2024
Valuation Technique Fair Value as at 30 September 2024 (£000s) Significant Unobservable Inputs Weighted Average Range Method or Unobservable Inputs Utilised Sensitivity % Sensitivity to changes in significant unobservable input (£000s)
Market approach using comparable trading multiples 694,618 EV/LTM Revenue Multiple 5.84x 1.17x - 9.26x 1/2/3/4/5/6 +/- 25% + 77,257 / -82,054
EV/2024E Revenue Multiple 6.46x 1.94x - 10.26x 1/2/3/4/5/6 +/- 25% + 32,600 / -20,947
EV/LTM Earnings Multiple 10.11x No range 1/2/3/4/5/6 +/- 25% + 8,962 / -8,962
EV/2024E Earnings Multiple 11.15x No range 1/2/3/4/5/6 +/- 25% + 9,568 / -9,567
EV/Book Value Multiple 2.17x No range 1/2/3/4/5/6 +/- 25% + 9,233 / -9,233
EV/Book Value 2024E Multiple 2.11x No range 1/2/3/4/5/6 +/- 25% + 9,702 / -9,702
Illiquidity discount -10.0% No range 5 +/- 25% + 162,027 / -148,637
Implied premium/(discount) -14.8% No range 5 +/- 25% + 289 / -17,834
Likelihood of insolvency 75.0% No range 8 -/+ 25% + 40,367 / -
Expected Proceeds 99,038 Execution Discount -8.2% No range 7 +/- 25% + 7,539 / -23,176
The Company has an established control framework with respect to the
measurement of fair values.
The Company's Valuation Committee regularly reviews significant unobservable
inputs and valuation adjustments. Valuations are prepared by an independent
third party valuer and the Valuation Committee assesses the evidence prepared
to support the conclusion that these valuations meet the requirements of the
standards, including the level in the fair value hierarchy in which the
valuation should be classified.
The following table shows a reconciliation of the opening balance to the
closing balance for Level 1 and 3 fair values:
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Level 1 Level 1 Level 3 Level 3
Opening balance 2,015 10,284 793,656 770,092
Transferred to/(from) Level 1/(Level 3) 124,973 - (124,973) -
Purchases - - 31,793 23,421
Sales - (9,025) (139,043) (44,933)
Total gains/(losses) included in net gains on
investments in the Statement of Comprehensive Income
- on assets sold - 6,405 58,615 (51,821)
- on assets held at year end (8,627) (5,649) 81,040 96,897
118,361 2,015 701,088 793,656
During the year ended 30 September 2025, the investment in Klarna Group PLC
was reclassified to Level 1 from Level 3 following its listing on the New York
Stock Exchange. The net unrealised gains for the year included in the
Statement of Comprehensive Income relating to those Level 3 assets held at the
reporting date amount to £81,040,000 (2024: £96,897,000).
Investments are moved between levels at the point of the trigger event.
The main risks that the Company faces arising from its financial instruments
are:
(i) market risk, including:
• price risk, being the risk that the value of investments will
fluctuate because of changes in more investee-company specific performance as
well as market pricing of comparable businesses;
• interest rate risk, being the risk that the future cash flows of
a financial instrument will fluctuate because of changes in interest rates;
and
• foreign currency risk, being the risk that the value of
financial assets and liabilities will fluctuate because of movements in
currency rates.
(ii) credit risk, being the risk that a counterparty to a financial
instrument will fail to discharge an obligation or commitment that it has
entered with the Company.
(iii) liquidity risk, being the risk that the Company will not be able to
meet its liabilities when they fall due. This may arise should the Company not
be able to liquidate its investments.
Other price risk
The management of price risk is part of the portfolio management process and
is characteristic of investing in equity securities. The investment portfolio
is managed with an awareness of the effects of adverse price movements through
detailed and continuing analysis with an objective of maximising overall
returns to shareholders. Although it is the Company's current policy not to
use derivatives, they may be used from time to time for the purpose of
efficient portfolio management and managing any exposure to assets denominated
in currencies other than pound sterling.
If the investment portfolio valuation rose or fell by 25% at 30 September 2025
(2024: 25%), the impact on net asset value and the comprehensive gain for the
year would have been £204,862,362 (2024: £198,917,798). The calculations are
based on the investment portfolio valuation as at the Statement of Financial
Position date and are not necessarily representative of the year as a whole.
Interest rate risk
The Company is exposed to interest rate risk on its cash and cash equivalent
and loans and borrowings balances. Interest rate risk arises when prevailing
market interest rates fluctuate. The Investment Adviser manages interest rate
risk by ensuring that it obtains market rates on the Company's cash and cash
equivalent and loans and borrowings balances, whilst simultaneously managing
liquidity and credit risk.
At 30 September 2025 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Quoted equity 118,361 - - 118,361
Unquoted equity - - 701,088 701,088
118,361 - 701,088 819,449
At 30 September 2024 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Quoted equity 2,015 - - 2,015
Unquoted equity - - 793,656 793,656
2,015 - 793,656 795,671
If interest rates rose or fell by 1.00% compared to those available at 30
September 2025 (2024: 1.00%), the impact on net asset value and the
comprehensive gain for the year would be £472,000 (2024: £446,000). These
calculations are based on the cash and cash equivalents and loans and
borrowings balances at the Statement of Financial Position date.
Foreign currency risk
The Company does not normally hedge against foreign currency movements but
takes account of this risk when making investment decisions. The Company
invests in securities denominated in foreign currencies which give rise to
currency risks.
Foreign currency exposure:
Investments Cash Debtors Creditors
£'000 £'000 £'000 £'000
2025
Assets
US Dollar 178,797 421 24 9
Euro 91,489 - - -
Swiss Franc 13 113 - -
270,299 534 24 9
2024
Investments Cash Debtors Creditors
£'000 £'000 £'000 £'000
2024
Assets
US Dollar 151,968 18,841 983 64
Euro 36,064 858 1 -
Swedish Krona 120,562 264 - -
Swiss Franc 153 107 - -
308,747 20,070 984 64
During the year, pound sterling weakened by an average of 1.21% (2024: 2.24%)
against all of the currencies in the investment portfolio (weighted for
exposure at 30 September 2025). In a similar scenario, where the value of
pound sterling had strengthened against each of the currencies in the
portfolio by 1.00% (2024: 2.00%), the impact on Net Asset Value and the total
comprehensive gain for the year would have been negative £2,682,000 (2024:
negative £6,053,868). If the value of pound sterling had weakened against
each of the currencies in the investment portfolio by 1.00% (2024: 2.00%), the
impact on the Net Asset Value and total gains and comprehensive gain would
have been positive £2,736,000 (2024: positive £6,300,964). The calculations
are based on the investment portfolio valuation and cash and cash equivalents
balances as at the year end and are not necessarily representative of the year
as a whole.
Credit risk
Credit risk is the risk that a counterparty to a financial instrument will
fail to discharge an obligation or commitment that it has entered into with
the Company. The Risk Committee has in place a monitoring procedure in respect
of counterparty risk which is reviewed on an ongoing basis.
The carrying amounts of financial assets best represent the maximum credit
risk exposure at the Statement of Financial Position date, and the main
exposure to credit risk is via the Company's Depositary who is responsible for
the safeguarding of the Company's cash balances.
At the reporting date, the Company's financial assets exposed to credit risk
amounted to the following:
2025 2024
£'000 £'000
Cash and cash equivalents 118,118 44,612
Sorted Holdings Convertible Loan Note 316 316
wefox Holding AG Convertible Loan Notes 90,361 17,351
Deep Instinct Subordinated Notes 3,634 -
Deep Instinct Convertible Loan Note 889 -
Other receivables 9,415 1,376
222,733 63,655
All the assets of the Company which are traded on a recognised exchange are
held on its behalf by Citibank UK Limited, the Company's Depositary.
Bankruptcy or insolvency of the Depositary may cause the Company's rights with
respect to securities held by the Depositary to be delayed or limited.
The credit risk on cash is managed by using counterparties or banks with high
credit ratings assigned by international credit rating agencies. Bankruptcy or
insolvency of such financial institutions may cause the Company's ability to
access cash placed on deposit to be delayed, limited or lost.
At the reporting date, total cash held with Citibank UK Limited and
Butterfield Bank (Guernsey) Limited amounted to the following:
2025 2024
'000 '000
Pound Sterling (GBP) (£) £ 61,098 £ 24,542
US Dollar (USD) ($) $ 565 $ 25,190
Euro (EUR) (€) € - € 1,031
Swedish Krona (SEK) SEK - SEK 3,581
Swiss Franc (CHF) CHF 121 CHF 121
The credit ratings of Citibank UK Limited and Butterfield Bank (Guernsey)
Limited were A-1 and A-2, respectively, at 30 September 2025 (2024: A-1 and
A-2, respectively)(.)
Liquidity risk
Liquidity risk is defined as the risk that the Company does not have
sufficient liquid resources to meet its obligations as they fall due. In
managing the Company's assets, the Company will seek to ensure that it holds
at all times a portfolio of assets (including cash) to enable the Company to
discharge its payment obligations as they fall due. The Company may also
maintain a short-term overdraft facility that it may utilise from time to time
to manage short-term liquidity.
The Company invests in a number of unquoted securities which are not readily
realisable. These investments make up 80% (2024: 94%) of the net assets as at
30 September 2025.
The Company's liquidity risk is monitored by the Risk Committee in accordance
with established policies, procedures and governance structures in place. Cash
flow forecasting is reviewed by the Risk Committee to ensure that the Company
has sufficient cash to meet its obligations as they fall due.
The maturity profile of the Company's current assets and liabilities is
presented in the following table.
Between Between
Up to 3 and 12 1 and 5
3 months months years Total
£'000 £'000 £'000 £'000
2025
Assets
Cash and cash equivalents 118,118 - - 118,118
Sorted Holdings Convertible Loan Note 316 - - 316
wefox Holding AG Convertible Loan Notes - 90,361 - 90,361
Deep Instinct Subordinated Notes - - 3,634 3,634
Deep Instinct Convertible Loan Note - - 889 889
Other receivables 9,415 - - 9,415
Liabilities
Loans and borrowings - (70,928) - (70,928)
Other current liabilities (1,483) - - (1,483)
126,366 19,433 4,523 150,322
Between Between
Up to 3 and 12 1 and 5
3 months months years Total
£'000 £'000 £'000 £'000
2024
Assets
Cash and cash equivalents 44,612 - - 44,612
Sorted Holdings Convertible Loan Note 316 - - 316
wefox Holding AG Convertible Loan Notes - - 17,351 17,351
Other receivables 1,376 - - 1,376
Liabilities
Other current liabilities (1,328) - - (1,328)
44,976 - 17,351 62,327
Capital management objectives, policies and procedures
The structure of the Company's capital is described in note 15 and details of
the Company's reserves are shown in the Statement of Changes in Equity on page
79.
The Company's capital management objectives are:
· to ensure that it is able to continue as a going concern; and
· to generate long-term capital growth through investing in a
portfolio consisting primarily of equity or equity-related investments in
unquoted companies.
The Board, with the assistance of the Investment Adviser, regularly monitors
and reviews the broad structure of the Company's capital. These reviews
include:
· the level of gearing, set at limits in normal market conditions,
between 5% and 25% of net assets, which takes account of the Company's
position and the views of the Board and the Investment Adviser on the market;
· the extent to which revenue reserves should be retained or
utilised; and
· ensuring the Company's ability to continue as a going concern.
19. Related parties
2025 2024
£'000 £'000
Directors' fees
Total Directors' fees charged 478 398
Directors' fees outstanding - -
As at 30 September 2025 the following Directors had holdings in the Company:
Number of % of Ordinary Shares outstanding
Ordinary Shares as at 30 September 2025
Andrew Haining 79,000
0.0155
Stephen Coe 60,909
0.0120
Simon Holden 89,500
0.0176
Anne Ewing 55,000
0.0108
Tim Cruttenden 21,298
0.0042
Margaret O'Connor -
-
S Cruttenden (son of Tim Cruttenden) 11,170
0.0022
As at 30 September 2024 the following Directors had holdings in the Company:
Number of % of Ordinary Shares outstanding
Ordinary Shares as at 30 September 2024
Andrew Haining 79,000
0.0133
Stephen Coe 60,909
0.0102
Simon Holden 89,500
0.0150
Anne Ewing 55,000
0.0092
Tim Cruttenden 21,298
0.0036
Margaret O'Connor -
-
S Cruttenden (son of Tim Cruttenden) 11,170
0.0019
20. Post balance sheet events
Between 1 October 2025 and the date of signing of these Audited Financial
Statements, the Company repurchased 13,572,083 Ordinary Shares for a total
consideration of £15,811,294.
On 2 October 2025, the Company repaid £10 million of the debt facility
principal to Barclays Bank PLC.
On 14 November 2025, the Company invested a further $1.5 million in Deep
Instinct. The investment takes the form of a convertible loan note, with
equivalent terms to those set out in note 18.
There has not been any other matter or circumstance occurring subsequent to
the end of the financial year that has significantly affected, or may
significantly affect, the operations of the Company, the results of those
operations, or the state of affairs of the Company in future financial years.
Corporate Information
Directors
Andrew Haining, Chairman
Stephen Coe (Senior Independent Director)
Anne Ewing
Simon Holden
Tim Cruttenden
Margaret O'Connor
Registered office
IQ EQ Fund Services (Guernsey) Limited
PO Box 60
Fourth Floor
Plaza House
Admiral Park
St Peter Port
Guernsey, GY1 4BF
Investment Adviser
Chrysalis Investment Partners LLP
3 Orchard Place
London, SW1H 0BF
AIFM
G10 Capital Limited
4th Floor
3 More London Riverside
London, SE1 2 AQ
Financial Adviser and Corporate Broker
Panmure Liberum
Ropemaker Place Level 12
25 Ropemaker Street
London, EC2Y 9LY
Deutsche Numis
45 Gresham Street
London, EC2V 7BF
Barclays Bank plc
1 Churchill Place
London, E14 5HP
Appointed 14 May 2025
Administrator and Company Secretary
IQ EQ Fund Services (Guernsey) Limited
PO Box 60
Fourth Floor
Plaza House
Admiral Park
St Peter Port
Guernsey, GY1 4BF
Registrar
Computershare Investor Services (Guernsey) Limited
1st Floor, Tudor House
Le Bordage
St Peter Port
Guernsey, GY1 1DB
Depositary
Citibank UK Limited
Citigroup Centre
Canada Square
Canary Wharf
London, E14 5LB
English Legal Adviser to the Company
Travers Smith LLP
10 Snow Hill
London, EC1A 2AL
Guernsey Legal Adviser to the Company
Ogier (Guernsey) LLP
Redwood House
St Julian's Avenue
St Peter Port
Guernsey, GY1 1WA
Independent Auditor
KPMG Audit Limited
Glategny Court
Glategny Esplanade
St Peter Port
Guernsey, GY1 1WR
Definitions and Alternative Performance Measures
BENCHMARK PERFORMANCE
With reference to investment valuation, application of the performance of a
benchmark or pool of comparable companies to an unlisted company to determine
a valuation.
DISCOUNT/PREMIUM
The amount by which the market price per share of an investment company is
lower or higher than its net asset value per share. The discount or premium is
normally expressed as a percentage of the net asset value per share.
DRAWDOWN
With reference to index performance, the maximum percentage loss in value over
a given time period.
EBITDA
Earnings before interest, tax, depreciation and amortisation.
EV
Enterprise Value
IRR
Internal Rate of Return - with reference to investment performance, calculated
using the Excel XIRR formula.
LTM
Last Twelve Months
NET ASSET VALUE
The Net Asset Value ("NAV") is the amount by which total assets exceed total
liabilities, i.e., the difference between what the company owns and what it
owes.
NAV PER SHARE
NAV expressed as an amount per share.
NAV PER SHARE GROWTH
With reference to fund performance, NAV at the end of the stated period
divided by NAV at the beginning of the stated period, as a percentage.
PERCENTAGE OF PORTFOLIO THAT IS PROFITABLE
The percentage of the portfolio's total value represented by companies
generating a positive underlying EBITDA in the last twelve months.
ROTE
Return on Tangible Equity - the measure of a company's net income relative to
the tangible element of shareholders' equity, i.e. excluding intangible assets
such as goodwill.
TOTAL LIQUIDITY
Total liquidity includes available cash and near-cash assets, including listed
assets. The formula for total liquidity is 'Cash and cash equivalents' plus
listed assets i.e. Level 1 assets under the IFRS fair value hierarchy.
TRADING MULTIPLE
With reference to an investment valuation, enterprise value divided by the
annual revenue, or other financial metric such as profit, of the company.
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