Chrysalis managing partners Nick Williamson (right) and Richard Watts (left).
Shareholders of Chrysalis Investments (CHRY) have voted in favour of a change to the trust’s investment policy which will see it wind up over the next three years.
The resolution received significant support with 97.9% of votes in favour of the changes, compared to 2.1% against. The turnout for the extraordinary general meeting, which took place on Tuesday (24 March), was just below 60%.
Andrew Haining, chair of Chrysalis, said: "I would like to thank shareholders for their support for the revised strategy. The board will now implement an orderly realisation of the company's assets, in a manner consistent with maximising the portfolio value over a three-year period."
Chrysalis Investments to propose three-year wind down
As outlined in the plans, all additional investments will now be ceased and the continuation vote scheduled for 2027 will be postponed to February 2029.
Capital will be returned to shareholders via share buybacks, tender offers and compulsory redemptions over the next three years.
Shavar Halberstadt, equity research analyst at Winterflood Securities, said: "Previous communications on the strategy tended to be less explicit, as the managers were keen to avoid the impression of being a forced seller."
He added that, despite the managers now appearing to be sidelined, "it would be helpful to leverage their in-depth knowledge of the underlying businesses to maximise value".
Halberstadt continued: "The Klarna lockup period should expire in the near term, which will be a good test case of how the board judges maximising value versus achieving liquidity."
Chrysalis Investments board eyes investment policy change as manager airs concerns
Shares in Chrysalis have risen 3% today (25 March), according to data from MarketWatch.
The trust, which has its largest holding in UK fintech Starling, has struggled to outperform the wider sector over recent years.
According to data from the Association of Investment Companies (AIC), Chrysalis has recorded a -15.8% share price total return over the past year, well below the 50.1% share price total return of the Growth Capital AIC sector over the same period.
On a three- and five-year basis, the trust has chalked up share price returns of 53.3% and -61.2%, respectively, underperforming the sector's 85.7% and -43.8%.
Chrysalis has also been trading at a wide discount to its net asset value (NAV), which stood at 51.1% at the time of reporting.
