by Val Cipriani, Investors Chronicle, April 10, 2025:
Novice investors are often warned against backing a company just because they appreciate its products..
The majority of private companies in trust portfolios are names that only experts in certain sectors will be familiar with. But the table below lists 11 private companies that UK investors may recognise..
The UK is brimming with fintech companies, but not all of them go public and many tend to stay private for longer than they once did.
Growth capital trust Chrysalis Investments (CHRY) falls into the first category. Its two biggest holdings, Starling Bank and Klarna, are recognisable brands often featured in the press, and together account for 44 per cent of its assets..
It’s worth keeping in mind that even if Klarna’s IPO goes as planned, this will not necessarily result in instant liquidity for the trust. Often, existing investors in a company are not allowed to sell their stake for six months or a year, notes James Carthew, head of investment companies at QuotedData. So the final exit can depend on what happens to the share price in the interim..
“You had all of the excitement in the easy money times, when the way people pay for stuff was changing, and Klarna was just doing really, really well. But it was sucking in loads of capital to maintain that growth, and in the excitement, the valuation reached silly levels,” explains Carthew. In 2022, when interest rates went up, Klarna still needed capital to expand and had to raise money in a much more challenging environment, a process that led to the valuation drop.
Since that time, however, Klarna has become profitable, partly by reducing its workforce and automating some of its processes via artificial intelligence; this means it is now in much better shape for an IPO, Carthew argues.
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