REG - Merian Chrysalis Inv - Net Asset Value(s)

Chrysalis InvestmentsAnnouncement

01/09/2020 07:01

RNS Number : 5494X
  
Merian Chrysalis Investment Co. Ltd
  
01 September 2020
  
 

The information contained in this announcement is restricted and is not for publication, release or distribution in the United States of America, any member state of the European Economic Area (other than the Republic of Ireland), Canada, Australia, Japan or the Republic of South Africa. 
 
This announcement contains inside information.
 
1 September 2020
 
 
Merian Chrysalis Investment Company Limited (the "Company")
 
Quarterly NAV Announcement 
 
 
Net Asset Value
The Company announces that as at 30 June 2020 the unaudited net asset value ("NAV") per ordinary share was 137.26 pence. 
 
The above NAV calculation is based on the Company's issued share capital as at 30 June 2020 of 336,742,424 ordinary shares of no par value.
 
June's NAV represents a 26% uplift since 31 March 2020. The principle contributing factors to this increase were:
-      Re-rating, driven by thematic positioning - There has been a strong rebound in equity markets since the beginning of the period and a material re-rating of technology and ecommerce assets. The portfolio is particularly exposed to these sectors, and assets have typically been valued with reference to relevant sets of listed comparable companies.
 
-      Realisations - TransferWise Ltd ("TransferWise") conducted a secondary share sale which valued the business at US$5 billion. As announced on 20 July 2020, the Company participated in this transaction. TransferWise's new valuation was applied to the Company's residual holding for the purpose of the June NAV calculation given its proximity to the period end. This led to a gross increase in the NAV per ordinary share of approximately 9p.
In addition, the trading performance of the portfolio through the period was generally robust and, in some instances, there was a marked acceleration in quarter-on-quarter growth.
 
In terms of individual positions, in addition to the TransferWise transaction detailed above, the key NAV drivers, on a unit basis, were:
 
-      Embark Group - where the benefits of recent significant M&A have been recognised in the valuation.
 
-      The Hut Group Limited and Klarna Bank AB - where there has been a significant re-rating of the set of comparative companies used for valuation purposes.
Portfolio Activity
 
During the three-month period ending 30 June 2020, the Company completed a £20 million investment in Featurespace Ltd and follow-on investments in Secret Escapes Limited, Starling Bank Limited and FinanceApp AG ("wefox").
 
As detailed above, the Company also had its first realisation post period end, raising approximately £20 million. This transaction served to raise capital for reinvestment, while controlling the position size of the largest holding within the portfolio at that time.  
 
Portfolio Composition 
As at 28 August 2020, the portfolio composition was as follows: 



Portfolio Company


% of Investment Portfolio




TransferWise


15.6%




Starling Bank Limited


12.9%




Embark Group Limited


12.1%




Klarna Bank AB


12.0%




The Hut Group Limited


11.8%




Graphcore Limited


11.3%




Featurespace Limited


4.3%




wefox


3.7%




Sorted Holdings Limited


2.3%




Secret Escapes Limited


1.8%




Growth Street Holdings Limited


0.6%




Gross cash and equivalents


11.5%



Source: Merian Global Investors. Holding sizes, as at 28/08/2020, are calculated using 30/06/2020 valuations, adjusted for FX as at 28/08/2020 and include transactions concluded post the NAV calculation period. Due to rounding the figures may not add up to 100%.
The Hut Group Limited ("THG")
 
The Board notes the announcement by THG of the publication of its registration document and potential intention to float. These detail an expected fixed-price deal equating to an equity valuation of £4.5bn, pre-new money.
June's NAV mark for THG reflects a significant move in the comparative peer group used for valuation purposes, resulting in an increase in the carrying value for this position of approximately 68%. If THG successfully completes an IPO at the proposed valuation, this would result in a further uplift to the carrying value of the position of approximately 17%, implying an additional increase (over and above that already included in the 30 June NAV) of approximately 2p per share and result in THG comprising approximately 13% of NAV, all other things equal. 
Outlook
 
The outlook for the Company is positive. The portfolio has proven to be resilient against a tough market backdrop and in many cases is benefitting from accelerated channel shift.
 
There are a number of later-stage opportunities within the portfolio and the Investment Advisor hopes that they will translate into successful realisations in the medium term. The Company's first realisation, which occurred post period end, highlights the global appetite for high-quality assets.
 
The Company currently has gross cash of approximately £54 million, which represents considerable liquidity. To this end, the Investment Advisor continues to assess a range of new ideas and follow-on opportunities, and is confident of its ability to deploy these proceeds in a timely manner.
 
With a portfolio that is well positioned thematically, the Investment Advisor is optimistic about prospects for the Company over the remainder of the year.
 
Factsheet
 
An updated Company factsheet will shortly be available on the Company's website:  https://www.merian.com/chrysalis/
 
Corporate Update
 
The Board has now completed its due diligence following the acquisition of the Company's Investment Adviser's parent company, Merian Global Investors Limited, by Jupiter Fund Management plc. As a result, the Board can confirm that there will be no change to the investment advisory team.
 
-ENDS-
 
 
 



For further information, please contact: 
 
Merian Global Investors: 
Amelie Shepherd 
 


 
 
+44 (0) 20 7332 7500 
 




Liberum: 
Gillian Martin / Owen Matthews 
 


+44 (0) 20 3100 2000 




Maitland Administration (Guernsey) Limited: 
Elaine Smeja


+44 (0) 1481 749364 



 
LEI: 213800F9SQ753JQHSW24
A copy of this announcement will be available on the Company's website at https://www.merian.com/chrysalis/.
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.
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
  END
 
 
NAVWPUGURUPUPGG