Merian Chrysalis Inv - Quarterly NAV and COVID-19 Portfolio Update
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Quarterly NAV Announcement and COVID-19 Portfolio Update
Net Asset Value
The Company announces that as at
The above NAV calculation is based on the Company's issued share capital as at
The changes in valuation of the Company's portfolio that are included in the NAV are principally a function of three inputs:
· The trading performances of underlying assets - Across the wider stock market,
· Comparable valuations - The Investment Advisor notes the significant impact that COVID-19 had on global equity markets and listed comparable companies over the period. While it is hard to be certain of the medium and long-term effects of the pandemic, the Investment Advisor further notes the generally strong rebound in equity markets since period end;
· The type of instrument being valued - A number of the Company's shareholdings contain downside protection, often in the form of preference structures, which can help to mitigate the impact of a decline in assessed valuations
The Investment Advisor is pleased with the performance of the portfolio. While certain companies have seen growth moderate versus expectations, a number have seen enhanced trading as a result of COVID-19. Among the aims of the Company, as set out at IPO, are to invest in companies that have both the ability to deliver growth rates substantially higher than the average
In the Investment Adviser's experience, significant macroeconomic events typically accelerate already established trends. We believe COVID-19 will be one such event. Given the shutdown of many "traditional" areas of the economy, businesses and consumers have had to rely much more heavily on technology and online channels. These were sectors already growing faster than the wider economy, but have now been given added impetus. Not only can this lead to higher growth rates in the short term, it can also drive new user adoption at significantly lower cost than previously experienced.
With this in mind, we believe the Company is well positioned at this particular time from a thematic perspective and the strategy of the Company therefore remains unchanged.
Given the impact of COVID-19, the Investment Advisor felt it appropriate to collate recent, pertinent news on the investee companies, to give investors a better understanding of current trends.
In the period,
The company has reacted well to lockdown - with a business model well suited to remote working - and monthly transfer volumes remain healthy.
The key news from Graphcore over the period was the successful capital raise of
The business has adapted well to lockdown, following COVID-19, and continues to see strong engagement from sales leads.
During the quarter Starling launched new functionality, particularly a business toolkit aimed at SMEs that assists with invoice and cash flow tracking and helps submit VAT returns to HMRC. In February, it raised a further
The bank adapted well to lockdown, helped by the fact it was created as an online offering. Post period end major steps were taken, with the bank being accredited for both the Coronavirus Business Interruption Loan Scheme, where a
Significant progress has been made over the last few months. Starling has now opened more than 1.4 million current accounts, including 155,000 business accounts, since launching its banking app in
The company also announced that
Embark completed its acquisition of
Embark has been recognised in the WealthTech 100 as one of the most innovative Wealth Tech companies in 2019 and 2020.
In March, THG reported a surge in demand for its health, beauty and nutrition products across its world-leading brands, including MyProtein.com and Lookfantastic.com. This led the group to bring forward its recruitment plans from later this year, with the creation of 500 permanent positions across manufacturing, fulfilment and logistics. The majority of roles (c350) will be created at THG's 1m sq. ft. manufacturing and fulfilment centre in
Ingenuity, THG's end-to-end ecommerce platform, is also gaining significant traction. Post period end, the company announced the signing of a
THG is currently trading at elevated levels, driven by the performance of non-discretionary nutrition and personal care categories, and is ahead of its 2020 budget.
wefox has had a successful start to the year and now generates more than
The company's group owns ONE, an insurance company, and wefox, a digital marketplace for insurance that employs 330 people and serves 350,000 customers across six markets. The company operates in
Sorted has had a very strong start to the year, generating annual recurring revenue growth in excess of 100% year-on-year and winning a number of material clients.
During the period, Sorted signed
Sorted's carrier library, which represents a material barrier to entry for new entrants to the market, continues to expand with new carriers in
Generally, the impact of COVID-19 has seen retailers increasingly relying on their digital capabilities and this has led to increased focus and spending on their online propositions, including with Sorted.
As an online travel business, the company has seen a significant impact from the pandemic and related restrictions to travel. As previously announced, the Company recently made a
As previously reported, two significant loans that the company had originated fell into default over the final quarter of 2019, which was very disappointing. Given the nature of this investment, this was a relatively small unit within the portfolio at outset. The combination of the defaults, exacerbated by COVID-19, led Growth Street to initiate a 'liquidity event' in the first quarter of 2020 and close investor access to its platform. This has enabled the company to maintain stability within its loan book and will help to protect both borrowers and investors from any further disruption as a result of COVID-19.
During the three-month period ending
Following a number of recent transactions, the Company is now approximately 88% per cent fully invested.
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% of Investment Portfolio
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Cash and Cash Equivalents
The Investment Advisor recognises that the full ramifications of COVID-19 may take some time to emerge and is continuously assessing its capital requirements. Based on a range of reasonable COVID-19-related trading scenarios and regular contact with its investee companies, the Investment Advisor continues to believe the Company has adequate liquidity to support its portfolio. As of the date of this announcement, available cash and equivalents were approximately
An updated Company factsheet will shortly be available on the Company's website: https://www.merian.com/chrysalis/
The Board has noted the acquisition of the Company's Investment Adviser's parent company,
For further information, please contact:
+44 (0) 20 7332 7500
+44 (0) 20 3100 2000
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+44 (0) 1481 749364
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 Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.
This information is provided by RNS, the news service of the
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