Chrysalis swoops on second investment in a week as it backs Revolution Beauty Aim listing

Unusual transaction for £1.1bn trust which is known for targeting late-stage investments, two to five years out from IPO

Chrysalis Watts and Williamson

Chrysalis Investments has swooped on its second new investment this week as it becomes a key investor for cosmetics company Revolution Beauty ahead of its IPO. 

On Tuesday the trust announced its investment adviser Jupiter Investment Management had become a cornerstone investor of Revolution Beauty.  

The makeup and skincare group which sells products through retail giants like Boots and Superdrug is planning to float on London’s junior Aim market next month for £500m. Chrysalis is planning to invest approximately £45m in the process.  

This is the second major investment Chrysalis managers Richard Watts (pictured left) and Nick Williamson (pictured right) have unveiled in a week. On Monday the pair announced they had ploughed £75m into retirement savings platform Smart Pension as part of a £165m funding round. 

Earlier this year they raised £300m to put toward a £1bn pipeline of “strong investment opportunities” which includes £250m worth of follow-on opportunities for existing holdings.

Unusual transaction for late-stage investor Chrysalis

Watts and Williamson became involved with Revolution Beauty after they were approached by CEO Adam Minto as part of a pre-IPO exploratory meeting or “pilot fishing” exercise due to their ability to invest in both private and public companies. 

The transaction is slightly unusual for Chrysalis which tends to invest in private, late-stage businesses that are two to five years out from IPO. Only one of the holdings in its concentrated portfolio, The Hut Group, has floated so far since the trust’s launch in November 2018, though money transfer app Wise is planning to list next month in what looks set to be one of the City’s largest IPOs. 

However, the £1.1bn trust is able to invest up to 20% of gross assets in companies it has not held prior to IPO, calculated at the point of investment.  

Having analysed the investment case for Revolution Beauty and undertaken channel checks on the brand, the managers determined it has “significant runway for growth”. 

The cosmetics company sets itself apart by identifying beauty trends among social media influencers on TikTok and Instagram and bringing them to the mass-market within 16 weeks, a much shorter timescale than global competitors which can take between six to 12 months to launch new products 

This strategy has helped Revolution Beauty expand rapidly. Over the last 14 months it has generated revenues of £157.6m and adjusted earnings of £13.1m. 

“With a small market share in a huge market and a compelling customer proposition, we believe Revolution Beauty is well placed to grow aggressively in the years ahead,” Watts and Williamson said. 

See also: Chrysalis Investments duo: ‘Baillie Gifford are doing a lot in America and China, but our connections are nearer to home’

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