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- Chrysalis reports quarterly NAV growth and a modest share price rise
Chrysalis Investments (CHRY) has released a quarterly update to end December 2023 and its annual results for the year ending 30 September 2023. This is the last set of annual results released by the CHRY team under its tenure at Jupiter, as the investment team has previously announced that it will launch its own independent investment firm this year.
CHRY’s investment advisers commented: “Last year the investment adviser was hopeful that wider market risk appetite would support realisations from the portfolio in 2023, including the reopening of the IPO market. This was partly predicated on the apparent emergence of some price stability in the market. While the IPO market has arguably shown signs of life – particularly in the US with the flotation of companies such as Arm – the more widespread confidence that is necessary to deliver a meaningful reopening has not been forthcoming. This situation is arguably more acute in the UK, which in 3Q 2023 only saw one Main Market flotation – CAB Payments – which promptly warned on profits and saw its share price fall over 80%.
The investment adviser has continued to focus on helping the portfolio companies get in the best possible shape for an eventual exit; Klarna moving into profitability is a significant, positive step in the right direction. This work centres around both maximising potential exit valuation, as well as installation of systems and governance processes required for an exit.
While speculation has swirled around Klarna’s IPO over the last few years [see our recent story], this is the first time the investment adviser has seen the company publicly state conditions are now “in place” for it to consider such a move. The ramifications for Chrysalis of an exit that at least underpins the asset’s valuation are hard to understate. Such a move could potentially deliver substantial liquidity into the company and allow the new CAP [capital allocation policy] to come into effect.
A commitment to return up to £100m of capital to shareholders – representing approximately 25% of the company’s market capitalisation at the time of writing – should be viewed as a powerful indicator of the board and investment adviser’s ambition to manage the prevailing share price discount.“
CHRY : Chrysalis reports quarterly NAV growth and a modest share price rise
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