Chrysalis Investments - Shepherding its portfolio through the storm

In its first three years, Chrysalis Investments (CHRY) generated significant NAV and share price returns for investors. Its advisers set out to build an exciting portfolio of fast-growing, disruptive and potentially market-leading companies. An abrupt change in market sentiment towards these types of growth businesses has since impacted on CHRY’s NAV, with falls in the values of listed investments and a notable write down in the valuation of Klarna. However, this is set against good news coming from portfolio companies such as Starling Bank and wefox.
In a market where financing for growth companies has become harder to obtain, CHRY believes that it is fortunate to have cash on hand from its first full exit to support portfolio companies, if needed. However, its advisers say that increasingly, these businesses are becoming profitable and cash generative.
The 57.3% discount may represent a cushion against any further bad news. The advisers note that, in time, sentiment will switch back, and if the portfolio lives up to the potential that the advisers believe it has, CHRY’s current share price could have long way to climb.