The Merian Chrysalis Investment Company is seeking to raise mroe than £100m having seen its shares trade at a premium since the trust's launch in November.
The trust, which is advised by Merian Global Investors (MGI), announced today it is offering new ordinary shares under its placing programme.
MGI said it expects the new Merian Chrysalis shares will be issued at a premium to the latest available NAV, but a discount to the market price.
Merian Chrysalis is the first trust launch from Mark Gregory's firm and is co-managed by small and mid-cap-managers Richard Watts and Nick Williamson. It invests primarily in later-stage private companies and is about 80% invested following a number of recent investments.
The management team said it has "a pipeline of exciting opportunities, with a number of potential investments undergoing due diligence", and as such, MGI is now seeking additional capital to facilitate these investments while around 50% of the proceeds will be used to increase exposure to a number of the existing portfolio holdings.
MGI said it expects this transaction will be "welcomed by investors in its open-ended funds, as recent events have resulted in a shift in perception of the role of unlisted investments in this type of vehicle", referring to the the focus on the liquidity of open-ended funds in light of the Woodford fund suspension.
Watts commented: "Over the past decade, there has been a significant increase in the number of businesses delaying an IPO 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.
"The strategy has continued to experience strong demand from investors and later-stage private businesses seeking capital from an experienced asset manager.
"Now Merian Chrysalis is approximately 80% invested, it is an opportune time to expand the portfolio and quickly capitalise on our strong pipeline of investment opportunities.
"By using approximately half of the proceeds to acquire additional stakes in existing holdings, investors will benefit from a well-balanced portfolio, as well as the continuation of a sufficient level of full investment."
Dan Nickols, head of UK small- and mid-cap equities at MGI, added: "Disruptive companies in the later stage of unquoted life represent an incredibly exciting investment opportunity and an asset class we believe will be highly profitable for our investors.
"We have always maintained a prudent approach to unlisted holdings, investing only in established businesses, combined with strict compliance oversight.
"While investors recognise the benefits of our approach, recent events have resulted in a heightened level of interest regarding this type of investment in open-ended funds.
"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.
"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, while reducing their direct unlisted exposure, without bearing the costs of an open-market sale."