Investment Trust Insider on Merian Chrysalis

Investment Trust Insider on Capital Gearing Trust

Investment Trust Insider on Merian Chrysalis – James Carthew: Merian should leave private equity to experts

The proposed launch of Merian Chrysalis raises a question over how far fund managers can transfer stock-picking skills from the public to private markets.

I recently promised to return to the subject of managers of listed equities buying unquoted companies after Merian Chrysalis announced its intention to float. This investment trust would invest in companies that were also aiming to list on the stock market and would be managed by Richard Watts and Nick Williamson, two managers best known for investing in listed smaller companies.

We’ll know shortly whether it has succeeded in raising the minimum £75 million it needs to proceed.

The idea rang a bell with me. St Peter Port Capital (SPPC) raised £75 million when it launched in April 2007 to invest ‘in growth companies, predominantly immediately prior to an initial public offering’ (IPO).

Launched at £1, SPPC’s shares drifted off and were caught up in the aftermath of the financial crisis. It bought back shares at 30p early in 2009 and this stabilised its share price for a while. Today, however, it trades at 8.5p, having returned just 8.75p to shareholders through dividends since launch. It still holds a couple of the ‘pre-IPO’ investments it made in 2008.

It wouldn’t be fair to extrapolate too much from St Peter Port Capital’s fate. For one thing…  read more here