Chrysalis Investments managers Nick Williamson and Richard Watts have bulked up their position in THG after its shares slid by one fifth in the third quarter.
At the end of September, the trust’s NAV per ordinary share was 251.96p, up 7.7% from 233.93p in June.
Starling Bank and You & Mrs Jones drove returns over the period, with the former rising by 39% and the latter 53%. Wise, which IPO’d over the period, also saw its shares spike 35%, while Swedish buy now pay later firm Klarna was up 6%.
However, these gains were offset by Chrysalis’ investment in THG, which saw its share price fall from 610p in June to 507p by the end of September.
Formerly known as The Hut Group, the health and beauty e-commerce site was the first of Chrysalis’ late stage companies to float last year for £5.4bn. But this year its share price has been rocked by concerns over corporate governance, including its ‘golden share’ dual class share structure. It has lost 78% year-to-date, with shares currently down around 179p.
Addressing the rapidly declining share price in the trust’s NAV update, Chrysalis managers Williamson (pictured right) and Watts (pictured left) said they had engaged with the company and revisited their investment case. Having found no “substantive change to the investment thesis since IPO” the pair said there was “significant upside potential” in THG’s shares and increased their position to 3.1%.
Chrysalis portfolio as at 24 November 2021
| Portfolio Company | % of investment portfolio |
| Klarna | 27.6% |
| Starling Bank | 15.5% |
| Wefox | 7.8% |
| You & Mr Jones | 7.1% |
| Smart Pension | 6.5% |
| Wise | 5.1% |
| Graphcore | 4.6% |
| Embark | 4.2% |
| InfoSum | 3.6% |
| Deep Instinct | 3.6% |
| THG | 3.1% |
| Tactus | 2.9% |
| Revolution Beauty | 2.7% |
| Featurespace | 2.6% |
| Secret Escapes | 1.8% |
| Sorted | 1.3% |
| Growth St | 0.1% |
| Cash | 1.8% |
Source: Chrysalis Investments
Watts and Williamson added they have “two modest follow-ons” that they were likely to be making before the year-end.
As at 24 November, the pair had £24m of cash available. However they added they have additional liquidity from their listed assets, totalling £147m, as well as the proceeds from the sale of their shareholding in Embark to Lloyds.
Earlier this year Chrysalis managers Richard Watts raised £300m in an oversubscribed placing to take advantage of a pipeline of £250m worth of follow-on opportunities and £1bn of new investment opportunities.
Since then, they have poured £80m into follow-ons, including £19m into the Hut Group, €30m into Wefox and £35m into Starling Bank.
They have also initiated brand new holdings like Smart Pension in June and Deep Instinct and Revolution Beauty in July. In August they have made investments in Infosum and Tactus.
