The closed-end portfolio recently made a £50m investment in Klarna and a £20m in Starling Bank adding to positions in Growth Street and Transferwise.
Merian Chrysalis, an investment trust that focuses on equity investments into unquoted firms, particularly in the fintech space, is looking to raise £100m of new shares.
The new share placing opens today and the expected closing date is 23 September 2019 however it may be sooner if commitments exceed £200m.
Richard Watts, manager of Merian Chrysalis and the Merian UK Mid Cap Fund at Merian Global Investors, says over the last 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 per cent 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.”
About half of the cash raised is expected to be invested a number of existing holdings, including the acquisition of positions currently held in Merian’s open-ended UK small-mid cap equity funds. It is anticipated that Merian Chrysalis will purchase these interests at a “modest discount” to the latest valuation.
Analysts at Numis point to the move to the fundraise as well flagged given its quick deployment of most of the initial £100m raised at launch in April.
“It is interesting to see the listed fund acquiring assets from the open-ended fund, and given the industry backdrop it is not surprising to see an open-ended fund reducing its exposure to illiquid holdings. The listed-fund will benefit from acquiring these assets at a discount, although the level has not been quantified,” Numis said.