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Chrysalis Investments Ltd reported a sharp fall in net asset value in the first half of its financial year, as weaker valuations for key portfolio holdings amid volatile equity markets more than offset continued operational progress across its investments. The Guernsey-based, UK and Europe-focused investor said net asset value per share fell 22% to 133.94 pence at March 31 from 171.65p at September 30. Total net assets declined 26% to £647 million from £875 million. The March figure was revised down 3.33p per share from the NAV that Chrysalis previously reported, after its auditor identified an error in the external valuer’s application of the valuation waterfall for insurance technology firm wefox. Chrysalis said most of the NAV decline in the financial first half occurred during the second quarter, with the three months to March 31 accounting for a 31.4p per share fall. Starling Bank, buy-now-pay-later provider Klarna, and wefox accounted for the bulk of the write-down. Starling’s carrying value fell by 6.6p per Chrysalis share, Klarna by 15.0p and wefox by 10.8p, together contributing 32.3p of the overall 37.7p NAV decline. Chair Andrew Haining said the reduction in NAV ‘largely reflects the de-rating of comparable peer groups amid significant equity market volatility, rather than the operational progress of our portfolio companies.’ He noted that Starling continued to make operational progress, including securing a fourth Engine banking software contract with New Zealand’s SBS Bank, while customer growth continued following positive regulatory engagement. Chrysalis said Klarna’s valuation was hit by a 63% decline in its share price during the period, reflecting geopolitical tensions, concerns over artificial intelligence-related disruption, broader macroeconomic uncertainty, and a downgrade to its 2026 profit guidance, despite first-quarter gross merchandise volume growth of 33%. The company said wefox’s valuation was affected by a funding uncertainty discount introduced during the first quarter and by a revised valuation methodology. Following the period end, Chrysalis completed a €7 million follow-on investment in the insurer as part of a wider funding round, resulting in improved economic terms. During the period, Chrysalis repurchased 26.6 million shares for approximately £29.3 million. However, following the adoption of an orderly realisation strategy, the board ended the buyback programme on April 30. Future capital returns will depend on cash realisations from the portfolio. Subsequent to the period end, Chrysalis also acquired a further £8.5 million secondary stake in Smart Pension and repaid its Barclays PLC debt facility after selling its remaining holding in Wise Group PLC and part of its investment in Klarna. The company reported a total comprehensive loss of £198.5 million for the six months to March 31, compared with a comprehensive gain of £38.6 million a year earlier. Investment losses totalled £191.1 million, against gains of £41.3 million in the prior-year period. Shares in Chrysalis rose 2.2% to 78.00 pence in London on Tuesday morning. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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