Merian Chrysalis is in line for a major windfall as a tech unicorn that was dumped into the portfolio as part of a stock transfer from Merian’s open-ended range following the Neil Woodford scandal unveils plans for a £4.5bn London listing.
The Hut Group is Merian Chrysalis’ fourth largest holding making up a punchy 9% of the portfolio. Managers Richard Watts (pictured) and Nick Williamson began building a stake in December 2018, a month after their trust floated on the London Stock Exchange. They were able to boost their stake further after Merian confirmed it was shifting unquoteds from its small and mid-cap Oeics to the trust.
At the end of March Merian Chrysalis’ holding was valued at £32.7m. But that is set to skyrocket as the tech unicorn readies to list with a market cap of £4.5bn in what will become the biggest City IPO this year.
The listing, pencilled in for 16 September, will see the firm target a £920m fundraise through issuing new shares plus a sale of existing shares of an amount to be confirmed later. It will be a free float of at least 20% on a standard listing on London’s main stock exchange.
The victory for the Merian trust comes a day after James Anderson’s Scottish Mortgage trust benefited from a double whammy of IPOs as Ant Group and Palantir Technologies confirmed listings within hours of one another.
See also: Ant Group’s $200bn listing set to boost Scottish Mortgage
Five other Merian funds hold The Hut Group
Merian Global Investors said due to an agreement with The Hut Group it cannot reveal its overall stake in the company. But documents from Companies House show it is held by the £424.3m UK Dynamic Equity fund and the £418.1m Specialist Equity fund in addition to the £330.0m Merian Chrysalis trust.
Trace amounts can also be found in Merian’s mid and small cap Oeics, which include Watts’ UK Mid Cap fund, Willamson’s UK Smaller Companies Focus fund and Dan Nickols’ UK Smaller Companies fund. The funds’ overall exposure to The Hut Group was cut when Merian announced it would be transferring the bulk of their unquoted holdings to Merian Chrysalis following blowback from the Woodford scandal which shone a spotlight on illiquid assets in Oeics.
In addition to Merian The Hut Group co-founder Matthew Moulding is in line for a hefty payday. Sky News reports Moulding could be awarded more than £700m worth of shares via a bonus scheme if the company achieves a market cap of £7.3bn by 2022.
The Manchester tech group revealed in its announcement it has expanded rapidly in the 16 years since it was founded, with annual sales growing from £1m in 2004 to £1.1bn in 2019.
The firm reported growth had accelerated further over the first half of the year with sales hitting £675.6m and adjusted EBITDA clocking in at £60.5m.
The e-commerce unicorn also counts former Tesco boss Terry Leahy and Ocado chairman Lord Rose among its backers, as well as Blackrock which poured £66m into the business along with Belgian investor Sofina last December, according to Sky News.
