Merian Chrysalis investment trust is planning to raise more than £100m for further investments.
The firm, which aims to generate long-term capital growth through investing in fast-growing and disruptive unquoted companies, announced today (September 10) that more than £100m would be made available by issuing ordinary shares.
The move comes after the company’s shares have traded at a premium to net asset value, where the shares themselves are worth more than the assets in the trust, since its launch in November 2018.
According to Merian Chrysalis, this reflected a “strong demand” for access to the underlying companies within the investments and the “considerable appetite” for this part of the market.
The firm stated following a number of recent investments — including Embark Group, Klarna Holding and Sorted Holdings — the portfolio was now around 80 per cent invested, with a number of potential investments in the pipeline.
Merian Global Investors, the company’s investment adviser, is aiming to access the £100m to push forward with new investments but around 50 per cent of the proceeds is set be used to acquire additional stakes in existing holdings.
This will involve buying unquoted holdings it currently holds in its open-ended funds and placing them in the closed-ended investment trust Merian Chrysalis.
According to Richard Watts, manager of Merian Chrysalis, this meant investors would benefit from a well-balanced portfolio.
He said: “Over the last decade there has been a significant increase in the number of businesses delaying an initial public offering due to the increasingly short-term focus of stock markets.
“Our scale and reputation in the smaller companies market has afforded us access to some of Europe’s most exciting private businesses and Merian Chrysalis was launched last year to exploit this growing opportunity.”
Fund manager Dan Nickols said: “We believe this is beneficial to Merian Chrysalis investors, who will scale-up their exposure to these exciting businesses, and to investors in our open-ended funds, as they can retain access to these attractive investments indirectly through their holding in Merian Chrysalis."
Mr Nickols said disruptive companies in the later stage of unquoted life represented an “incredibly exciting” investment opportunity.
He added: “Having established Merian Chrysalis as the primary vehicle for unquoted investments, and received considerable demand for the strategy, now is an opportune time to transition a proportion of unquoted shares from our open-ended funds to the closed-ended strategy."
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