The trust’s total net assets fell over £200mn in the six months to March 31, from £1.38bn to £1.26bn, according to interim results for the trust released on June 30.
This led to net asset value per share dropping 16 per cent in the period.
The trust attributed the loss in value to “weakening valuations of listed peers in the tech space”, with chair Andrew Haining saying the investment landscape has materially changed in the past six months.
He said: “Rising yields have impacted the valuations of long duration assets, with the derating of growth stocks being particularly marked.
“The appetite or ability to provide capital has reduced and, consequently, those investors who are providers of capital are demanding very attractive terms.”
Haining added that, as a result of the “attractive terms” being demanded from capital providers, the trust has ensured it has enough capital to support its portfolio.
The trust has struggled against its benchmark in the last six months, posting a total return of -33.7 per cent compared with its benchmark losing 26 per cent, according to FE Fundinfo.
The trust is managed by Jupiter Fund Management, which took over when it acquired Merian Global Investors in February 2020.
It invests in early stage, mostly unquoted, companies, and was launched to allow the fund managers to invest in unquoted equities - their specialism prior to the trust’s launch was investing in quoted small caps.
Portfolio funding plans
Around 60 per cent of the portfolio is not currently profitable, and the trust said it has been working with these companies on refining funding plans.
The average “cash runway” for the portfolio’s non-profitable holdings, the amount of time a company has enough cash for, is 14 months.
The trust’s managers said it currently holds £55mn in cash, which is enough to extend these runways “substantially”, by at least a year, provided other investors also plug money in.
However, the co-portfolio managers of the trust, Nick Williamson and Richard Watts, said while they recognise the current discount to Nav, they should still hold enough capital to support the existing portfolios while this “market dislocation” remains.
“Material falls in listed valuations typically create headwinds for our near-term Nav progression, but in our experience, shakeouts of this type also provide opportunities for the best companies to exploit in the medium term.
“If and when market conditions allow, or Chrysalis generates capital, share buybacks or new investments might be considered."
In January Jupiter said it will review the management fee structure on the trust after Watts and Williamson were paid a £60mn performance bonus for the year to September 2021.
New CEO
The chief executive of Chrysalis' manager Jupiter, Andrew Formica, announced he will step down from the firm last month.
Formica will step down in October this year, and will be replaced with chief investment officer Matthew Beesley, with the former saying the "initial phase" of the businesses' transformation had completed.
Beesley will take up the role of CEO at a turbulent time for Jupiter, which struggled with severe outflows of £1.6bn in the first quarter of the year.
Market commentators have said the outflows make it vulnerable to a takeover, despite Formica saying earlier this year that Jupiter does not see itself being part of the current wave of consolidation in the sector.
The outflows are focussed mainly in the group’s European and UK equity funds, but also in the Merian funds.
A few weeks prior to Formica's announcement, former board member Jon Little criticised the fund house, saying it has "lost its way" and needs to change its management and strategy.
sally.hickey@ft.com
