TIDMMERI
RNS Number : 2988I
Merian Chrysalis Investment Co. Ltd
11 December 2020
The information contained in this announcement is restricted and
is not for publication, release or distribution in the United
States of America, any member state of the European Economic Area
(other than the Republic of Ireland), Canada, Australia, Japan or
the Republic of South Africa.
This announcement contains inside information.
11 December 2020
Merian Chrysalis Investment Company Limited ("Merian Chrysalis"
or the "Company")
Quarterly NAV Announcement
Net Asset Value
The Company announces that as at 30 September 2020 the unaudited
net asset value ("NAV") per ordinary share was 160.97 pence.
The above NAV calculation is based on the Company's issued share
capital as at 30 September 2020 of 336,742,424 ordinary shares of
no par value.
September's NAV represents a 17.3% uplift since 30 June 2020,
driven by the strong operational and financial progress of a number
of assets, and the re-rating of listed comparable companies. The
following investee companies were the most significant drivers of
the NAV increase:
-- The Hut Group ("THG") - following its flotation on the London
Stock Exchange at a higher valuation than the carrying value of the
asset as of 30 June 2020, its subsequent strong performance in the
aftermarket and the follow-on investment made by the Company at the
point of THG's Initial Public Offering ("IPO");
-- FinanceApp AG ("wefox") - which saw a substantial rerating of
its closest listed comparators and continues to grow extremely
strongly;
-- Featurespace Limited ("Featurespace") - assisted by the
signing of a major contract with Fiserv over the summer;
-- Klarna Holding AB ("Klarna") - which undertook a major
funding round in the period at a materially higher price than its
carrying value, and;
-- Graphcore Limited ("Graphcore") - that launched its second
generation IPU on 7 nanometre architecture in July, which offers
significant improvements in performance.
Elsewhere, Starling Bank Limited ("Starling") continues to grow
exceptionally strongly.
Overview
The trading performance of the portfolio over the period was
generally robust, with many investee companies continuing to
benefit from accelerated channel shift, from offline to online,
caused by COVID-19. In the few instances where companies saw a
negative impact from the pandemic, activity levels improved as the
initial shock passed and lockdown restrictions were eased.
Portfolio activity
Over the period the Company had two realisation events.
In July, the Company participated in a significant secondary
round undertaken by TransferWise Ltd ("TransferWise"), selling
approximately $25 million of stock, at a valuation level materially
higher than the position held as at 31 March 2020. Given the timing
of this transaction, this new valuation level was reflected in the
30 June 2020 NAV. This transaction was undertaken to control
position size and the Company's Investment Adviser remains
optimistic about the potential for TransferWise to continue to
deliver strong growth.
In mid-September, THG completed its successful IPO on the London
Stock Exchange at an issue price of 500p per share and performed
well in the aftermarket to close the period at 598p per share. This
was a major milestone for Merian Chrysalis, representing its first
investment to have listed, thus completing a full crossover
"lifecycle".
The Company made three investments in the period, all during
September.
The Company invested approximately GBP23 million in a major
funding round by Klarna, which raised $650 million at a pre new
money valuation of $10 billion. This additional capital will
support its strong growth in the US and UK markets which could be a
significant value driver in future periods. Over the nine months to
September 2020, Klarna generated 160% year-on-year growth in global
app downloads and acquired 21 million new consumers, while net
credit losses were 28% lower year-on-year in 3Q 2020.
The Company invested approximately GBP14.4 million of follow-on
capital into THG's IPO, utilising its own ability to crossover.
Given its relationship with THG, the Company's Investment Adviser,
Merian Global Investors (UK) Limited, was named as one of only five
global cornerstone investors in the IPO.
At period end, the Company also invested $60 million in You
& Mr Jones LLC ("You & Mr Jones"), a world leading global
marketing technology group. The Company's Investment Adviser
believes You & Mr Jones fits well with its investment criteria,
offering a scalable technology solution into a very large
addressable market that is ripe for disruption. This transaction
was financed by the GBP95 million fund raise conducted by the
Company, that closed shortly after period end.
Portfolio Composition
As of 10 December 2020 the portfolio composition was as
follows:
Portfolio Company % of investment portfolio
Klarna 14.4%
--------------------------
THG 14.1%
--------------------------
TransferWise 11.6%
--------------------------
Starling 10.4%
--------------------------
Graphcore 9.8%
--------------------------
Embark 9.0%
--------------------------
wefox 7.3%
--------------------------
You & Mr Jones 6.8%
--------------------------
Featurespace 5.5%
--------------------------
Secret Escapes 2.5%
--------------------------
Sorted 2.5%
--------------------------
Growth Street 0.2%
--------------------------
Cash 5.7%
--------------------------
Source: Merian Global Investors (UK) Limited. Holding sizes, as
of 10 December 2020, are calculated using 30 September 2020
valuations, adjusted for FX as of 10 December 2020 and capturing
transactions concluded post the NAV calculation period, including
the equity raise in October. The holding value of THG is based on
the closing share price of 598p, as at period end. Due to rounding
the figures may not add up to 100%.
Investment Adviser Outlook
Nick Williamson and Richard Watts (co-portfolio managers)
comment:
"We remain optimistic over the outlook for the portfolio, driven
by a continuation in the robust aggregate financial and operational
performance of our underlying investee companies. Realisation
events and funding rounds over the period, with strong third-party
participation - particularly by new investors - demonstrate the
inherent value within the portfolio and validates our valuation
framework.
While in aggregate the portfolio has seen a benefit over recent
months from accelerating channel shift as a result of COVID-19, we
believe a significant number of the new users gained by our
portfolio businesses over this time will prove to be permanent, as
COVID-19 has amplified already well established trends. Our
portfolio businesses are typically using technology to deliver
solutions that customers want to use and, as such, we believe these
new customers place many of our companies in a strong position to
continue to deliver robust growth over the coming year.
As of 10 December 2020, the Company had cash of approximately
GBP38 million. This reflects the GBP95 million of gross proceeds
raised post period end, less the $60 million You & Mr Jones
investment, as well as some small follow-ons in Sorted Holdings
Limited, wefox and Secret Escapes Limited. As of 10 December 2020,
total liquidity, which adds our liquid holdings - currently just
THG - to the cash position, was approximately GBP142 million.
We continue to see numerous new opportunities fed into our
origination pipeline to consider, as well as follow-on prospects.
As such, we are confident of deploying the recent proceeds of our
raise in an accretive and timely manner."
Factsheet
An updated Company factsheet will shortly be available on the
Company's website: https://www.merian.com/chrysalis/
-S-
For further information, please
contact:
corporatecommunications@jupiteram.com
Media:
Merian Global Investors / Jupiter
Asset Management:
Magnus Spence +44 (0) 20 3817 1325
Liberum:
Gillian Martin / Owen Matthews +44 (0) 20 3100 2000
Maitland Administration (Guernsey)
Limited:
Elaine Smeja / Aimee Gontier +44 (0) 1481 749364
LEI: 213800F9SQ753JQHSW24
A copy of this announcement will be available on the Company's
website at https://www.merian.com/chrysalis/ .
The information contained in this announcement regarding the
Company's investments has been provided by the relevant underlying
portfolio company and has not been independently verified by the
Company. The information contained herein is unaudited.
This announcement is for information purposes only and is not an
offer to invest. All investments are subject to risk. Past
performance is no guarantee of future returns. Prospective
investors are advised to seek expert legal, financial, tax and
other professional advice before making any investment decision.
The value of investments may fluctuate. Results achieved in the
past are no guarantee of future results. Neither the content of the
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