The information contained in this announcement is restricted and is not for publication, release or distribution in the United States of America, any member state of the European Economic Area (other than to professional investors in Belgium, Denmark, the Republic of Ireland, Luxembourg, the Netherlands, Norway and Sweden), Canada, Australia, Japan or the Republic of South Africa.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019.

This announcement is an advertisement and does not constitute a prospectus and investors must only subscribe for or purchase any shares referred to in this announcement on the basis of information contained in the prospectus dated 10 March 2021 (the "Prospectus") published by Chrysalis Investments Limited (the "Company") and not in reliance on this announcement. This announcement does not constitute and may not be construed as, an offer to sell or an invitation to purchase, investments of any description, or a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement or referred to in other written or oral form is intended to form the basis of any contract of sale, investment decision or any decision to purchase shares in the Company.

1 December 2021

Chrysalis Investments Limited
("Chrysalis" or the "Company")

Proposed Placing

The Company today announces its intention to raise new capital under the Company's placing programme, as detailed in the Company's Prospectus dated 10 March 2021, through a placing (the ("Placing") of Ordinary Shares at a price of 238 pence (the "Issue Price"). The Issue Price represents a 1.7 per cent. premium to the pro forma Net Asset Value per Ordinary Share of the Company as at 30 November 2021 of 234 pence (the "NAV")*.

In conjunction with the Placing, there will be an offer made by the Company on the PrimaryBid platform of additional Ordinary Shares at the Issue Price (the "Retail Offer") to provide retail investors with an opportunity to participate in the equity fundraising alongside institutional investors. A separate announcement will be made shortly regarding the Retail Offer and its terms. For the avoidance of doubt, the Retail Offer is not part of the Placing. 

*The proforma Net Asset Value per Ordinary Share: (1) has been calculated using valuations of unlisted investments as at 30 September 2021 (as adjusted for foreign exchange movements to 30 November 2021), (2) has been calculated using the mid-market closing prices of listed investments as at 30 November 2021, and (3) includes transactions concluded in the portfolio between 30 September 2021 and 30 November 2021 at cost and therefore uses the Company's cash balance as at 30 November 2021.

Background and rationale for the Placing

Since raising £300 million in March 2021, the late-stage private market has exhibited strong growth and Chrysalis has continued to experience significant interest in its crossover proposition. At the time of the fundraise, the Investment Adviser outlined a strong pipeline of new investment and follow-on opportunities and set an expectation of adding one to three new units per annum.

Over the summer, origination into the Investment Adviser's new investment pipeline was considerably stronger than predicted, such that it has added five new investments to the portfolio since March 2021, significantly outperforming its earlier expectations. While certain follow-ons were undertaken (e.g. Starling, wefox and THG), given the quality of the new investment cases, the Investment Adviser chose to prioritise this channel over the period.

Use of proceeds

The expected use of new funds is primarily to drive the performance of existing assets in current portfolio companies via certain follow-on investments. In addition, the current effective number of investments is at the bottom end of the Investment Adviser's target range of 15 to 20, offering the opportunity to selectively add new holdings.

Follow-on opportunities: the "Power of Primary Capital"

The Investment Adviser typically sees a strong correlation between its supply of follow-on capital and the subsequent performance of the investee asset. This ability and willingness of Chrysalis to back its assets is one of its attractions to potential investee companies and demonstrates the Investment Adviser's belief in the "Power of Primary Capital". For example, considerable amounts of follow-on capital have been devoted to developing both Starling and wefox over the last two years (approximately £69 million and €60 million respectively). The revenue performance of both these businesses have been impressive, demonstrating high CAGRs (c.180% and c.160% respectively since initial investment) as fresh capital has allowed them to materially expand and develop their offerings. For Starling, this involved capital to back an entry into the UK lending market in early 2020, and for wefox this capital has allowed it to undertake accretive M&A and continue to fund high growth over the course of 2020.

The growth displayed by these two assets last year drove significant investor interest and was fundamental to the success of the substantial funding rounds they both undertook in 2021, and underpinned the material increase in valuations the companies achieved.

Revenue growth helps drive valuations in two key ways:

·    driving the fundamental financial metrics, such as sales and profit, that valuation multiples are often applied to; and

·    developing more valuable revenue streams and/or opening up new market opportunities, both of which can drive valuation upside.

An example of the latter would be Klarna. While valuation multiples have risen since first investment, from levels the Investment Adviser considered to be undervalued initially, the Investment Adviser believes this reflects the market's optimism over progress in the US, where the offering was accelerated via the addition of primary capital in 2019 and 2020.

The Investment Adviser believes there is considerable potential to invest selectively in the portfolio to enhance the growth prospects for a number of its investee companies, which it believes will generate value for shareholders by either enhancing the eventual return, and/or accelerating that return. To that end, it has identified two near-term opportunities where follow-on capital may be deployed, with a number of further opportunities, most likely in early 2022.

Selective new investments

While undertaking follow-ons is likely to be the key focus, the Investment Adviser still believes there is room to selectively add to the number of portfolio holdings.

Previously, the Investment Adviser has articulated a vision of a portfolio of 15 to 20 holdings to give shareholders a sense of what it believes to be an appropriate portfolio composition. Currently the Company has 17 assets, but this includes Embark - where a sale has been agreed to Lloyds Bank, subject to regulatory clearance - and Growth Street - where the company is in the final stages of liquidation.

Excluding these two assets means the portfolio consists of 15 effective assets, at the bottom end of the Investment Adviser's indicated range.

Expanding the portfolio brings diversification benefits to shareholders, not only just in terms of number of units, but also because it allows the Investment Adviser to invest in a wide spectrum of assets at slightly different stages of maturity. The Investment Adviser believes this latter point is important as it builds diversity into the likely exit dates of the portfolio to give the best possible chance of smoothing likely capital returns for reinvestment.

The track record of investing in new assets has been strong. "Cohort 2" assets - those funded by raises undertaken post investment of the Company's IPO proceeds, but prior to those made following the March 2021 raise - show very strong performance. This group of assets, which consists of Klarna, wefox, Embark, You & Mr Jones, Featurespace and Sorted, has generated a gross IRR of well over 100%. The Investment Adviser believes this clearly shows that diversifying the portfolio via new capital has been value accretive to existing and new shareholders.

Market outlook

Growth in the late-stage, private market has been substantial in the year to date. As of September 2021, the total capital committed in this sector of the market in Northern and Western Europe - the Company's current focus - was over double that invested over 2020 at c.£38 billion. Within the market, a major crossover player was present in c.15% of deals by number, versus just c.7% in 2019, demonstrating the attractiveness of this type of capital to investee companies. The bulk of these investors are of US origin, showing the gap in Europe that Chrysalis is aiming to fill.

With an established and well regarded platform, the Investment Adviser believes the Company is in an enviable position to exploit this growing market opportunity and that these dynamics are very supportive of its desire to continue to develop the Chrysalis proposition and capture this potential late-stage, private valuation accretion to the benefit of its shareholders.

Pipeline and capital raise

Given the opportunity set available to the Investment Adviser, it believes a capital raise of £125 million would give it the funding required to execute the majority of the likely follow-on opportunities available to the Company into early-2022. Considering the total pipeline, including some of the larger new investment opportunities, the Investment Adviser believes the Company could readily invest up to £175 million of fresh capital, with the aim of both accelerating growth in the portfolio, and to selectively add new investments. Historically, the Investment Adviser has been able to deploy funding efficiently, and expects this raise to be committed in a timely manner.

Expected Timetable for the Placing

Each of the times and dates set out below and mentioned elsewhere in this document may be adjusted by the Company, in which event details of the new times and dates will be announced via a Regulatory Information Service. References to a time of day are to London time.

Liberum Capital Limited and Numis Securities Limited are acting as Joint Bookrunners in respect of the Placing.

Capitalised terms shall have the meanings attributed to them in the Prospectus unless otherwise defined in this announcement.

 For further information please contact:

IMPORTANT INFORMATION

This announcement which has been prepared by, and is the sole responsibility of, the Directors of the Company has been approved for the purposes of section 21 of the Financial Services and Markets Act 2000 ("FSMA") by Jupiter Investment Management Limited (the "Investment Manager"), which is authorised and regulated by the Financial Conduct Authority.

This announcement is an advertisement and does not constitute a prospectus relating to the Company and does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for, any shares in the Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract therefor. Copies of the prospectus are available from the website (www.chrysalisinvestments.co.uk) and the Company's registered office

Recipients of this announcement who are considering acquiring Ordinary Shares are reminded that any such acquisition must be made only on the basis of the information contained in the prospectus which may be different from the information contained in this announcement. The Subscription for Ordinary Shares is subject to specific legal or regulatory restrictions in certain jurisdictions. Persons distributing this announcement must satisfy themselves that it is lawful to do so. The Company assumes no responsibility in the event that there is a violation by any person of such restrictions.

The Ordinary Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws or with any securities regulatory authority of any state or other jurisdiction of the United States. Accordingly, the Ordinary Shares may not be offered or sold within the United States or to, or for the account or benefit of US persons (as defined in Regulation S under the Securities Act ("Regulation S")), except pursuant to an exemption from or in a transaction not subject to, the registration requirements of the Securities Act. The Ordinary Shares are being offered and sold (i) outside the United States to non-US-persons in reliance on Regulation S and (ii) within the United States only to persons reasonably believed to be qualified institutional buyers ("QIBs"), as defined in Rule 144A under the Securities Act, that are also qualified purchasers ("QPs"), as defined in Section 2(a)(51) of the US Investment Company Act of 1940, as amended (the "Investment Company Act") and who deliver to the Company and Liberum or Numis Securities (as applicable) a signed Investor Representation Letter. The Company has not been, and will not be, registered under the Investment Company Act, and investors will not be entitled to the benefit of that Act. No offer, purchase, sale or transfer of the Shares may be made except under circumstances which will not result in the Company being required to register as an investment company under the Investment Company Act.

Neither this announcement nor any copy of it may be: (i) taken or transmitted into or distributed in any member state of the European Economic Area (other than to professional investors in Belgium, Denmark, the Republic of Ireland, Luxembourg, the Netherlands, Norway and Sweden), Canada, Australia, Japan or the Republic of South Africa or to any resident thereof, or (ii) taken or transmitted into or distributed in Japan or to any resident thereof. Any failure to comply with these restrictions may constitute a violation of the securities laws or the laws of any such jurisdiction. The distribution of this announcement in other jurisdictions may be restricted by law and the persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

Each of Liberum and Numis Securities which are authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting only for the Company  in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Liberum or Numis Securities (as applicable) or advice to any other person in relation to the matters contained herein. Neither Liberum, Numis Securities nor any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for this announcement, its contents or otherwise in connection with it or any other information relating to the Company, whether written, oral or in a visual or electronic format.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements".  These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology.  These forward-looking statements relate to matters that are not historical facts regarding the Company's investment strategy, financing strategies, investment performance, results of operations, financial condition, prospects and dividend policies of the Company and the instruments in which it will invest.  By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.  Forward-looking statements are not guarantees of future performance.  There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.    These factors include, but are not limited to, changes in general market conditions, legislative or regulatory changes, changes in taxation regimes or development planning regimes, the Company's ability to invest its cash in suitable investments on a timely basis and the availability and cost of capital for future investments.

The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by FSMA, the Listing Rules, the Prospectus Regulation Rules made under Part VI of the FSMA or the Financial Conduct Authority or other applicable laws, regulations or rules. 

Information to Distributors

Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK MiFIR Product Governance Requirements") and/or (where applicable to EEA investors and EEA firms) the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("Directive 2014/65/EU"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing Directive 2014/65/EU; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any manufacturer (for the purposes of the UK MiFIR Product Governance Requirements or MiFID II Product Governance Requirements, as applicable) may otherwise have with respect thereto, the shares the subject of the Placing have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as respectively defined in paragraphs 3.5 and 3.6 of the FCA Handbook Conduct of Business Sourcebook or the MiFID II Product Governance Requirements, as applicable; and (ii) eligible for distribution through all permitted distribution channels (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, Distributors should note that: (i) the price of the shares may decline and investors could lose all or part of their investment; (ii) the Shares offer no guaranteed income and no capital protection; and (iii) an investment in the shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook or the MiFID II Product Governance Requirements, as applicable; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares.

UK PRIIPs Regulation

In accordance with the UK version of Regulation (EU) No. 1286/2014 on key information documents for packaged retail and insurance-based investment products, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended (the "UK PRIIPs Regulation"), a key information document (the "KID") in respect of an investment in the Ordinary Shares has been prepared by the Company and is available to investors at www.chrysalisinvestments.co.uk.

If you are distributing Ordinary Shares, it is your responsibility to ensure that the KID is provided to any clients that are "retail clients".

The Company is the only manufacturer of the Ordinary Shares for the purposes of the UK PRIIPs Regulation and none of Liberum, Numis Securities or Jupiter Investment Management Limited are manufacturers for these purposes. None of Liberum, Numis Securities or Jupiter Investment Management Limited makes any representations, express or implied, or accepts any responsibility whatsoever for the contents of the KID prepared by the Company nor accepts any responsibility to update the contents of the KID in accordance with the UK PRIIPs Regulation, to undertake any review processes in relation thereto or to provide the KID to future distributors of Ordinary Shares. Each of Liberum, Numis or Jupiter Investment Management Limited and their respective affiliates accordingly disclaim all and any liability whether arising in tort or contract or otherwise which it or they might have in respect of the key information documents prepared by the Company. Investors should note that the procedure for calculating the risks, costs and potential returns in the KID are prescribed by laws. The figures in the KID may not reflect actual returns for the Company and anticipated performance returns cannot be guaranteed.