Investment Adviser's Report

Market Overview and NAV Performance

The six months to 31 March 2026 were dominated by general volatility and a marked deterioration in certain segments of global equity markets. Contributing factors to this included: renewed geopolitical tensions in the Middle East following the conflict involving Iran; growing investor concern around the disruptive implications of artificial intelligence for SaaS and other technology business models; and broader macroeconomic uncertainty. These factors had a specific impact on comparative peer groups used for assessing valuations of portfolio holdings: for example, bank valuations fell in response to global uncertainty, as did fintech names due to perceived threat of AI; both factors had a negative impact on the valuation of Starling, the Company's largest asset, and Klarna.

As a result, the Company's NAV per share declined from 171.65 pence at 30 September 2025 to 133.94 pence at 31 March 2026, a fall of 37.71 pence (22.0%). The bulk of this movement occurred during the second quarter of the period, with the three months to 31 March 2026 alone accounting for a 31.42 pence (19.0%) decline. The NASDAQ and S&P 500 reached year-to-date lows on 30 March 2026 before staging a sharp recovery; these indices had rebounded by 23.1% and 12.7% respectively at 25 June 2026, although those gains are not reflected in the period end valuations.

In the main, the NAV decline over the period reflects movements in the comparable peer groups used to value the Company's holdings rather than any deterioration in the operational performance of the underlying businesses. The Investment Adviser believes that the trading momentum across the portfolio remains robust, particularly at Starling, Smart and wefox, with each of the top five holdings now profitable before exceptional and one-off items.

Alongside this, the Investment Adviser has continued to make tangible progress in preparing assets for exit and in addressing the capital requirements of certain holdings. wefox is now funded until approximately the end of 2027, following the conclusion of a funding round in which the Company committed €7 million post period end, with the Investment Adviser having negotiated improved economics through that participation. Secret Escapes disposed of its Eastern European business, Slevomat, in December 2025, with proceeds used to repay group borrowings. Klarna, which completed its IPO on the New York Stock Exchange in September 2025 at $40 per share, came out of its six-month lock-up on 8 March 2026.

The 37.71 pence decline in NAV per share over the six-month period is largely attributable to fair value movements in the portfolio, with Starling, Klarna and wefox accounting for the majority of the write-down.

Klarna's shares fell from $36.65 at 30 September 2025 (already down from the $40 IPO price) before recovering somewhat from their lows, contributing approximately 15 pence of the decline across the period, closing at $13.09. wefox saw the introduction of a funding-uncertainty discount in the first quarter of the period; however, following the completion of a funding round this has been unwound. A change in valuation methodology at 31 March 2026 means the valuation itself has fallen further since 31 December 2025.

Starling, despite strong operational momentum, was marked down in the second quarter to reflect a c.20% fall in its comparable peer group, accounting for 12.38 pence of the decline in that quarter, having risen by 5.77 pence in the first quarter.

The buyback continued to provide NAV accretion, contributing 1.39 pence in the first quarter and a further 0.86 pence in the second quarter as shares were acquired at a wide discount to NAV.

At 31 March 2026, total NAV stood at £647 million, compared with £847 million at 30 September 2025, with the reduction reflecting both the valuation movements outlined above and the ongoing share buyback. Starling remains the largest holding at £374.7 million (57.9% of NAV), followed by Smart Pension at £123.5 million (19.1%), the listed Klarna position at £41.8 million (6.5%), wefox at £39.8 million (6.2%) and Brandtech at £26.2 million (4.0%). Together the top five holdings now represent approximately 94% of NAV, reflecting both the maturation of the portfolio and the disposal of less mature assets in recent periods.

Company Liquidity

The Company's liquidity position remains robust.

At 31 March 2026, gross cash and cash equivalents stood at £28.2 million, with the listed positions in Klarna and Wise valued at £41.8 million and £2.7 million respectively, giving a total liquidity position of approximately £72.7 million.

The reduction in gross cash over the period principally reflected the partial repayment of the Company's term loan, with the principal amount due reduced from £70.0 million at 30 September 2025 to £17.2 million at 31 March 2026, alongside continued execution of the share buyback programme. A total of 26.9 million shares were bought back into treasury during the period at a cost of approximately £29.3 million, taking the cumulative capital returned under the buyback programme to £115.7 million at period end (and to £117.4 million as of 30 April 2026). The Company ended the period with a net cash position of approximately £11 million after accounting for the remaining principal amount due on the term loan (£17.2 million).

Starling Group Holdings Limited ("Starling")

Starling has continued to make strong operational progress over the period, notwithstanding the valuation movement driven by the comparable peer group.

Starling delivered a fifth consecutive year of profitability in the financial year to 31 March 2026, reporting pre-tax profit of £217.1 million despite a modest decline in revenue to £887.4 million, primarily reflecting a lower interest rate environment and associated margin compression. Operationally, the business continued to perform strongly, with customer accounts increasing to 6.2 million, with higher deposit balances and transaction volumes evidencing deepening customer engagement. Strategic progress was particularly evident in the scaling of its technology platform, Engine, which drove revenue growth and expanded internationally, alongside continued investment in product innovation, including AI-enabled customer tools.

The bank delivered a series of new product launches, including the rollout of Starling Assistant in the second quarter, the UK's first agentic AI tool designed to help consumers manage their day-to-day finances, alongside a Making Tax Digital tool aimed at its SME customer base ahead of HMRC's revised compliance regime. These followed the launch in October 2025 of Scam Intelligence, the UK's first AI-powered tool to combat scams by allowing customers to upload images of online marketplace adverts for fraud assessment.

The cadence of product innovation, combined with both the lifting of a number of onboarding restrictions following positive regulatory engagement, and a new marketing campaign, drove higher customer onboarding and user growth, with the latter showing growth in new users of over 100% year-on-year since the beginning of April.

Engine, Starling's banking-as-a-service platform (BaaS), delivered two further significant contract wins during the period, materially advancing its commercialisation.

In November 2025, Engine signed a ten-year contract with Tangerine Bank to replatform its two million customers. Tangerine is a subsidiary of Scotiabank, one of the largest banks in North America with assets of approximately $1.4 trillion, and this represents the first "migration" deal of an existing book of business for Engine, marking a strong endorsement of the platform's capabilities. This was followed in the second quarter by the announcement of a fourth contract win with SBS Bank in New Zealand.

The Investment Adviser believes these wins support Starling CFO Declan Ferguson's articulation of a credible path to £100 million of committed recurring revenue at Engine by 2027, and notes that Engine is now legally separate from the UK bank, providing structural optionality.

Although the broader market sell-off in software names was partly driven by concerns around the disruptive impact of artificial intelligence on subscription software business models, the Investment Adviser believes Starling is well positioned to be a beneficiary rather than a victim of the AI transition.

The launch of Starling Assistant and Scam Intelligence demonstrates the bank's willingness and ability to deploy AI in customer-facing applications, while Engine's modern technology stack provides incumbent banks with a credible route to modernise legacy infrastructure as part of their own AI transformation programmes. The Investment Adviser believes this positioning, combined with the operational momentum at the core UK bank, supports a positive medium-term valuation trajectory.

Starling now has more than £500 million of surplus capital on its balance sheet, providing significant strategic optionality.

Over April 2026, new customer numbers have grown over 100% year-on-year, likely a result of two factors:

1.             In April 2026, Starling rolled out its largest ever brand campaign, spanning television, out-of-home, video-on-demand and social media; the campaign forms part of a customer activation drive following the brand refresh in September 2025 and the launch of the "Good with Money" positioning.

2.             Starling was able to lift a number of onboarding restrictions that have been in place, following positive regulatory engagement, which have had a corresponding positive impact on onboarding customer and underlying user growth. This should leave Starling well placed to drive the next phase of growth across both its core UK banking franchise and the Engine SaaS proposition.

Smart Pensions Limited ("Smart Pension" or "Smart")

Smart Pension has continued to grow and compound its assets under management (AuM) base over the period, supported by a combination of strong organic growth in net contributions and accretive M&A activity.

Following the acquisition of the WS Stakeholder Pension Scheme (£580 million of AuM) in November 2025 - one of the first acquisitions of a stakeholder scheme by a DC Master Trust - alongside the integration of the Options Master Trust consolidation, Smart Pension Master Trust ("SPMT") closed 2025 with over £9 billion of AuM. By mid-April 2026, SPMT had surpassed the £10 billion milestone, compared with approximately £2.1 billion of AuM at the end of 2021, representing an approximate five-fold increase over the last four years. The £10 billion threshold is particularly significant given that the Pensions Scheme Bill identifies £10 billion AUM as an interim waypoint on the "transition pathway" to £25 billion of assets by 2035, positioning SPMT favourably within the consolidating UK pensions market.

The Investment Adviser believes Smart is on a strong profit trajectory, supported by the operating leverage inherent in the platform business model as scale builds.

The combination of inbuilt growth from significant net annual contributions, the integration of recent acquisitions, and the potential for further judicious M&A in a consolidating market provides multiple levers for both revenue and margin expansion. The Investment Adviser sees this profitability ramp as a key driver of future valuation and notes that Smart sits within a small group of in-scope master trusts that are well placed to benefit from the structural shift towards larger, more efficient providers mandated by recent regulatory developments.

Keystone, Smart's technology platform business, also delivered material progress over the period.

The multi-phase technology partnership agreement signed with Hargreaves Lansdown's ("HL") Workplace business, announced in January 2026, will see Keystone power the HL Workplace proposition; HL CEO Richard Flint described the partnership as helping to "transform the client experience", and that Keystone was selected for its proven record of scalability and flexibility.

Keystone has continued to build a robust pipeline of potential clients and is well positioned to benefit from the broader trend towards platform-led delivery in the workplace pensions market.

Strategic interest in the UK pensions sector remains very high, providing helpful read-across for the implied value of SPMT.

In May 2026, WTW (formerly Willis Towers Watson) completed its acquisition of Cushon (with AuM of approximately £4 billion) and, in April 2026, Standard Life announced the acquisition of Aegon UK for £2 billion, a transaction which included the Aegon Master Trust.

The Investment Adviser believes the multiples implied by these transactions - particularly Cushon - support a significant valuation for SPMT and underline the strategic value of scaled, modern master trust platforms with strong technology underpinnings to potential acquirers in a rapidly consolidating market.

The Investment Adviser supported the Board in making a secondary investment into Smart post period end, to maintain the Company's pro rata position.

Klarna Group PLC ("Klarna")

Klarna's most recent performance continues to validate the Investment Adviser's core thesis, with strong growth translating into a clear change in profitability as earlier Fair Financing cohorts mature.

In Q1 2026, Klarna reported results modestly ahead of consensus across all key metrics, with GMV of $33.7 billion (+33% year-on-year) and revenue of $1,012 million (+44% year-on-year). Growth remained particularly strong in the US, where revenue increased by 67%. Transaction margin dollars rose 44% to $389 million, with margins broadly stable at 38%, while adjusted operating profit increased materially to $68 million (6.7% margin). This contrasts with Q4 2025, which saw a miss on profits due to the unexpectedly high growth in Fair Financing, which saw impairments rise due to the way loan provisioning is required to be calculated under IFRS. Importantly, Klarna reported its first quarter of positive net income, reflecting the improving underlying economics of the business.

Performance within Fair Financing remains encouraging and now represents approximately 12% of total volumes. While growth is moderating from elevated levels, this is expected and reflects the transition from rapid origination. As anticipated, earlier cohorts are now generating improved unit economics, supporting transaction margin expansion and overall profitability. Management commentary that transaction margin dollars is expected to grow faster than revenue as the loan book matures is consistent with the Investment Adviser's expectations.

Operating leverage is becoming increasingly evident. Revenue growth of 44% significantly outpaced growth in non-transaction-related operating expenses, which increased by only 3%, resulting in a meaningful expansion in operating margin compared to the prior period. This shift reflects Klarna's transition from a growth-focused model to one increasingly driven by scalable profitability.

Credit performance remains well controlled. Provisioning for credit losses at 31 March 2026 was broadly stable year-on-year at 0.55% of GMV, with underlying delinquency trends improving as underwriting models continue to mature. The short-duration nature of the loan book, combined with relatively low average customer balances, underpins a structurally lower risk profile compared to traditional revolving credit products.

Alongside improving financial performance, Klarna continues to build strategic optionality through its partnerships pipeline. Integrations with global payment service providers, including Stripe and Nexi, are now live and ramping, with further partnerships with JPMorgan Payments and Worldpay expected to launch during 2026. These partnerships significantly expand Klarna's addressable market over time and provide enhanced visibility on future GMV growth. Additionally, new integrations such as Google Gemini further embed Klarna within the evolving ecosystem of digital and "agentic" commerce.

While the valuation of Klarna has been impacted by broader equity market volatility and a reset of profit expectations at the full year 2025 stage, operational performance remains strong. Growth across key metrics continues to be robust, and the Investment Adviser remains confident that, as Fair Financing growth moderates and accounting headwinds unwind, Klarna will demonstrate the underlying profitability of its business model.

Overall, the first half represents further evidence of Klarna's transition towards a more capital-efficient and profitable model. The combination of strong top-line growth, improving unit economics, disciplined credit performance and a deepening partnerships pipeline provides confidence in the medium-term outlook.

wefox Holding AG ("wefox")

wefox delivered a positive trading performance over 2025, beating its budget and crucially achieving its first full year of profitability.

While the Group's principal operating subsidiaries in the Netherlands and Austria have been performing strongly for some time, the achievement of profitability at the consolidated level marks an important inflection point for the business and reflects the cumulative impact of the cost reduction and operational restructuring programmes implemented in prior years. The Investment Adviser views this profit milestone as supporting the case for a sustainable medium-term growth trajectory and providing a more credible platform from which to engage with prospective acquirers.

Following the achievement of profitability, wefox is now on a materially more stable footing than at any point in recent years.

The terms of the Group's existing debt arrangements had restricted the ability to upstream cash from the profitable operating subsidiaries to the Group level, creating a near-term funding requirement at the holding company. This funding requirement, identified in the prior quarter as approximately €12-15 million, prompted the Valuation Committee to introduce an uncertainty discount in the valuation at 31 December 2025. The Investment Adviser spent the bulk of the second quarter of the period working closely with wefox management and other shareholders to lead a funding solution, which culminated in the conclusion of a funding round shortly after the period end.

The Company committed €7 million as part of this larger funding round, alongside other existing investors, having previously made a €3 million (£2.6 million) bridging investment earlier in the period. Following this funding round, the Swiss audited statutory financial statements for 31 December 2025, were prepared and approved on a going concern basis. Management continues to assess a range of operational and financing actions that could extend the group's liquidity beyond the current base case projections.

The uncertainty discount applied at 31 December 2025, to reflect uncertainty over the company's funding pipeline, has now been removed from the valuation, although this was largely offset at 31 March 2026 by a change in the valuation methodology. Importantly, the Investment Adviser was able to negotiate materially enhanced economics through the recent investment, providing the Company with strong downside protection and higher gross proceeds at lower equity valuations - a structural improvement in the risk/reward profile of the holding which the Investment Adviser views as a significant achievement of the negotiation process.

TAF B.V. ("TAF"), which is the largest asset within the wefox group, continues to perform robustly and is highly profitable and cash generative.

With the Group's funding position now resolved and management focus freed up to concentrate on operational delivery, there is now a clear opportunity to drive equity value through TAF's expansion plans, particularly as the business looks to extend into new product categories and geographies.

The Investment Adviser believes the combination of the new funding, enhanced economic terms, demonstrated profitability, and a clear growth strategy at TAF positions wefox well to deliver value as the orderly realisation of the portfolio progresses.

The Brandtech Group LLC ("Brandtech")

Brandtech's carrying value declined from £36.8 million at 30 September 2025 to £26.2 million at 31 March 2026, primarily reflecting a contraction in valuation multiples across its listed peer group, including the major traditional advertising holding companies.

As with much of the listed technology and marketing services sector, peer multiples were impacted both by the broader risk-off market environment and by ongoing investor debate around the implications of generative AI for incumbent business models.

Operationally, Brandtech remains one of the leading generative AI marketing groups and has continued to deepen its strategic positioning over the period.

Pencil, the Group's GenAI marketing platform, has now produced more than two million ads and processed over $2.65 billion in media spend since launch. The strategic partnership with Boston Consulting Group (BCG), announced in May 2025, continues to support the transition of large enterprise clients from AI pilots into scaled deployments, while the launch of Pencil on the Google Cloud Marketplace in August 2025 has provided enterprise clients with a frictionless procurement route.

Brandtech also continued to attract significant industry recognition, having been named one of Fast Company's World's Most Innovative Companies for the third time in 2025, and serving as the sole ANA Official AI & Data Partner and WFA Strategic AI & Technology Partner for 2025.

While the pace of enterprise adoption has at times been slower than initially anticipated - with many advertisers pausing to assess optimal deployment approaches - the Investment Adviser believes the structural direction of travel remains supportive of Brandtech's positioning, and that it is well placed to benefit as confidence in AI-led advertising continues to build.

The recent appointment of Angela Tangas as global CEO of Oliver and Group Chief Strategy Officer further strengthens the senior leadership team as the business positions itself for the next phase of growth.

Secret Escapes Holding Limited ("Secret Escapes")

The principal development at Secret Escapes during the period was the disposal in December 2025 of its Eastern European business, Slevomat, to Genesis Capital.

While the headline consideration has not been publicly disclosed, the proceeds were sufficient to fully repay the group's borrowings, meaning that Secret Escapes entered 2026 with a substantially deleveraged balance sheet and meaningful unrestricted cash to support its core European markets. The Investment Adviser views this as an important strategic step which simplifies the group structure and removes funding risk.

The disposal also reflects the broader theme of portfolio simplification and exit preparation that has characterised the Company's engagement with its holdings over recent periods. By concentrating Secret Escapes around its core members-only European travel proposition and removing balance sheet leverage, management is well placed to drive operational performance in the markets where it has the strongest competitive position. This focus is expected to support both improved profitability and a clearer strategic narrative for any future realisation event.

Secret Escapes was carried at £15.9 million as at 31 March 2026 (representing 2.4% of NAV), broadly stable versus £15.7 million at 30 September 2025.

The Investment Adviser continues to engage closely with management on the operational and strategic agenda, including ongoing optimisation of the cost base and selective investment in the customer proposition, with a view to maximising the value that can be realised from the holding in due course.

Deep Instinct Limited ("Deep Instinct")

Despite some success with its partnership with Amazon Web Services, the progression of ARR at Deep Instinct remains below expectations, and cost cutting measures have been enacted. This, combined with weaker comparable peer valuations, saw the carrying value of Deep Instinct fall materially.

Investment Objective and Policy

Investment objective

From February 2026, the Company's investment objective is to maximise the value of its existing portfolio over a three-year period (from February 2026) and to make capital returns to shareholders upon realisation of investments.

Investment policy

The Company's investment policy is to effect an orderly realisation of its assets in a manner that is consistent with the Company's investment objective and the principles of good investment management. This process is expected to include sales of some or all of the Company's assets which may include running off certain assets in accordance with their timelines for a natural exit. Once the Company has completed the disposal of its assets, it is intended that the Company will be put into a voluntary liquidation process.

The Company will cease to make any new investments or to undertake any capital expenditure except:

(i) with the prior written approval of the Board and where, in the opinion of the Board, in its absolute discretion, the investment or capital expenditure is considered necessary or desirable to protect or enhance the value of any existing investment or to facilitate an orderly disposal; or

(ii) where the investment or capital expenditure is required under contract or applicable law or regulation by the Company or any vehicle through which it holds its investments.

Any such investment or capital expenditure being a "Permitted Investment".

In normal market conditions, the Company's level of gearing is not expected to exceed 20 per cent. of the Company's net asset value (calculated at the time of drawdown) but it is intended that the Company's existing debt facility will be repaid in full at its maturity (expected to be in September 2026). For the avoidance of doubt, the Company will not take on any new borrowings.

Subject to prior repayment of all amounts owed under the Company's borrowing facilities from time to time, the net proceeds received from the sales of assets will be returned to shareholders in an efficient and timely manner, as the Board considers appropriate, which may include compulsory redemptions, tender offers or share buybacks, subject to the maintenance of a working capital buffer to cover the forecast running costs of the Company and an appropriate provision for investments under i) and ii) above.

The level of such buffer will be kept under regular review by the Board. It is the Board's intention that as investments are sold and the likelihood for follow-on investing reduces, the provision for follow-on investing will reduce.

The Company will seek to dispose of listed securities received through IPO, or make asset disposals, in a manner and timeframe considered to balance the objective of maximising value and returning capital to shareholders, having regard to market conditions.

Subject to the ability of the Company to make Permitted Investments, any cash received by the Company that has not been used to repay borrowings prior to its distribution to the Company's shareholders will be held by the Company as cash on deposit and/or as cash equivalent securities, including short-dated corporate bonds or other cash equivalents, money market funds, cash funds or bank cash deposits (and/or funds holding such investments).

The Company may use derivatives for efficient portfolio management and managing any exposure to assets denominated in currencies other than pound sterling.

Changes to investment policy

Any material changes to the Company's investment policy set out above will require the approval of shareholders by way of an ordinary resolution at a general meeting and the approval of the Financial Conduct Authority. Non-material changes to the investment policy may be approved by the Board.

The Board of Directors

The Board comprises six independent non-executive Directors, including one female Director, who meet at least quarterly, in addition to ad hoc meetings convened in accordance with the needs of the business, to consider the Company's affairs in a prescribed and structured manner. All Directors are considered independent of the Investment Adviser for the purposes of the AIC Code and Listing Rule 11.2.13.

The Board is responsible for the Company's long-term sustainable success and the generation of value for shareholders and in doing so manages the business affairs of the Company in accordance with the Articles of Incorporation, the investment policy and with due regard to the wider interests of stakeholders as a whole. Additionally, the Board has overall responsibility for the Company's activities including its investment activities and reviewing the performance of the Company's portfolio. The Board are confident that the combination of its members is appropriate and is such that no one individual or small group of individuals dominates the Board's decision making.

The Directors, in the furtherance of their duties, may take independent professional advice at the Company's expense, which is in accordance with provision 20 of the AIC Code. The Directors also have access to the advice and services of the Company Secretary through its appointed representatives who are responsible to the Board for ensuring that the Board's procedures are followed, and that applicable rules and regulations are complied with.

To enable the Board to function effectively and allow the Directors to discharge their responsibilities, full and timely access is given to all relevant information.

Comprehensive board papers are circulated to the Board in advance of meetings by the Company Secretary, allowing time for full review and comment by the attending parties. In the event that Directors are unable to attend a particular meeting, they are invited to express their views on the matters being discussed to the Chairman in advance of the meeting for these to be raised accordingly on their behalf. Full and thorough minutes of all meetings are kept by the Company Secretary.

The Directors are requested to confirm their continuing professional development is up to date and any necessary training is identified during the annual performance reviews carried out and recorded by the Remuneration and Nomination Committee.

The current Board has been carefully selected against a set of objective criteria. The Board considers that the combination of its members brings a wealth of skills, experience and knowledge to the Company as illustrated in their biographies below:

Director Biographies

Andrew Haining (Chairman) (independent)

Andrew has had a 30-year career in banking and private equity with Bank of America, CDC (now Bridgepoint) and Botts & Company. During his career, Andrew has been responsible for over 20 private equity investments with transactional values in excess of $1 billion.

Andrew holds several Guernsey and UK board positions.

Stephen Coe (senior independent)

Stephen serves as Chairman of the Audit Committee. He is currently a Non-Executive Director of a number of private companies. Stephen has been involved with offshore investment funds and managers since 1990, with significant exposure to property, debt, emerging markets and private equity investments. Stephen qualified as a Chartered Accountant with Price Waterhouse in 1990.

Simon Holden (independent)

Simon is a Chartered Director ("CDir"), Fellow of the Institute of Directors and brings a combination of private equity investing and deep equity capital markets expertise to the Board. In his prior career in private equity, he was an investment director and held interim-executive roles across several portfolio companies whilst working at Terra Firma Capital Partners (and Candover Investments prior to that).

 

For the past decade, he has represented the interests of shareholders in a portfolio spanning:

•      LSE-listed FTSE-250 alternative asset companies (infrastructure, real estate, growth equity, IP rights, and activist mandates);

•      blue-chip global private equity funds (including Permira);

•      private operating companies (across energy transition, industrials and business services); and

•          pro-bono public sector advisory roles.

 

An experienced Senior Independent Director and FTSE-250 Risk Committee Chair, he has successfully executed a wide variety of value creation and corporate action strategies whilst navigating dynamic challenges and engaging with shareholders constructively to align board action with their diverse objectives.

 

Sam Dobbyn (independent)

Sam is a UK-based corporate executive with deep public markets experience and a proven record of optimising shareholder returns. He is currently a Non-Executive Director at Allied Minds plc. Until March 2022, he was CEO and previously CFO of Urban Exposure PLC where he reduced the cost base, managed a sale process and ultimately delivered a successful delisting of the business. He was previously Head of Financial Planning and Analysis and Head of Investor Relations at both TP ICAP PLC and Brit PLC. Sam is a qualified Chartered Accountant and has an Executive MBA from Warwick & Guanghua Business School.

Tim Cruttenden (independent)

Tim is Chief Executive Officer of VenCap International PLC, a UK-based asset management firm focused on investing in venture capital funds. He joined VenCap in 1994 and is responsible for leading the strategy and development of the firm. Tim is also a NED of Polar Capital Technology Trust, where he is Senior Independent Director.  Prior to joining VenCap, Tim was an economist and statistician at the Association of British Insurers in London. He received his Bachelor of Science degree (with honours) in Combined Science (Economics and Statistics) from Coventry University and is an Associate of the CFA Society of the UK.

Margaret O'Connor (independent)

Margaret brings over 30 years of international experience commercialising technology companies and evolving the governance structure and growth strategy of investment funds. Her plural career includes serving on the board of a FTSE 250 investment trust and as Chairman of a Mauritius Venture Capital fund. Both require stakeholder engagement to enhance value creation and oversight on disposal strategies.  Her experience as a US AdTech CEO and CMO - driving EU and Asia market expansions and leading a successful trade sale - combined with her tenure as a MasterCard International New Technology executive, shapes her board skill and mindset.

She earned her BA from Rutgers University and studied International Relations at Princeton University before moving to Seoul, Korea to work for the Korean Ministry of Finance.

Valuation Committee

The Board is of the view that the valuation process needs to be as efficient as possible while also providing for comprehensive and independent oversight. Consequently, the Board uses an independent Valuation Committee which comprises the following members:

Lord Rockley (Committee Chairman)

Anthony was an audit partner at KPMG until 2015, with a sector focus on private equity and venture capital. Over a 34 -year career with KPMG, Anthony was responsible for auditing private equity and venture capital companies and structures. Amongst other sector specific work, Anthony was a member of the International Private Equity and Venture Capital Guidelines Board for 9 years.

Diane Seymour Williams

Diane Seymour Williams has a career spanning over 30 years in asset and wealth management. She was a listed portfolio manager with Deutsche Asset Management (previously Morgan Grenfell) and became CIO and CEO of the asset management business in Asia. After returning to the UK, Diane subsequently held a number of board positions in the financial service sector. Currently she sits on the boards of Patria Private Equity Trust Plc, Mercia Asset Management Plc and is Chair of SEI's regulated UK subsidiary. Diane brings extensive fund management and portfolio oversight experience. In addition, she is a pro bono member of the Canal & River Trust investment committee and held a similar position for Newnham College, Cambridge for many years.

Jonathan Biggs

Jonathan Biggs has worked in the venture capital industry for 25 years. For 20 years, up until 2021, he was the COO at Accel, a leading global venture and growth capital investor, having been one of the company's first hires in Europe. During his time at Accel in London, he raised over $2.5 billion in five early-stage venture funds focused on Europe. For the last 5 years, Jonathan has been an investor in venture capital funds, both as a Partner at Top Tier Capital Partners where he led the European funds business, and prior to that, as a Managing Partner at SVB Capital.

The fourth member of the committee is Tim Cruttenden who has been a director of the Company since its formation.

Interim Management Report

For the six-month period ended 31 March 2026

Risks and Uncertainties

 

There are several potential risks and uncertainties which could have a material impact on the Company's performance and could cause actual results to differ materially from expected and historical results.

 

The Risk Committee has overall responsibility for risk management and control within the context of achieving the Company's objectives. The Board agrees the strategy for the Company, approves the Company's risk appetite and the Risk Committee monitors the risk profile of the Company. The Risk Committee also maintains a risk management process to identify, monitor and control risk concentration.

 

The Risk Committee's terms of reference, controls and reporting have been designed to manage the risks posed by the environment in which the Company operates. The Board's responsibility for conducting a robust assessment of the principal and emerging risks is embedded in the Company's risk map, which helps position the Company to ensure compliance with the Association of Investment Companies Code of Corporate Governance (the "AIC Code").

The main risks that the Company faces arising from its financial instruments are:

(i)     market risk, including:

 

·       price risk, being the risk that the value of investments will fluctuate because of changes in portfolio company-specific performance as well as the market pricing of comparable businesses;

 

·       interest rate risk, being the risk that the future cash flows of a financial instrument will fluctuate because of changes in interest rates; and

 

·       foreign currency risk, being the risk that the value of financial assets and liabilities will fluctuate because of movements in currency rates.

 

(ii)    credit risk, being the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered with the Company.

 

(iii)   liquidity risk, being the risk that the Company will not be able to meet its liabilities when they fall due. This may arise should the Company not be able to liquidate its investments.

 

(iv)   company failure, being the risk that portfolio companies may fail and result in loss of capital invested.

 

Considering the planned transition to a self‑managed model and the adoption of a defined realisation strategy, the Risk Committee has reviewed the Company's risk profile. During this review, the Committee acknowledged the increase in concentration risk that will result as assets within the portfolio are realised. The principal risks below therefore reflect those most relevant to the Company's revised investment strategy, portfolio composition and operating model for the remainder of the realisation period.

 

1.   Conflicts of interest

The removal of the Investment Adviser and the transition to a self-managed model increases the risk of actual or perceived conflicts of interest arising from the Company assuming direct responsibility for portfolio management, decision making and oversight. Failure to identify, manage and appropriately mitigate such conflicts could adversely impact governance standards, investment outcomes and stakeholder confidence.

 

2.   Portfolio performance

There is a risk that the Company is unable to realise the underlying investment thesis for the remaining assets in   the portfolio or to execute value enhancing initiatives effectively, which could result in lower than expected investment returns.

 

3.   Relative performance

There is a risk that the remaining assets cannot be realised at or above their current carrying values, and that the Company's returns fail to meet performance expectations relative to comparable asset classes or peers during the realisation period.

 

4.   Financial/Capital markets

Since the IPO of Klarna,  the portfolio increasingly comprises listed assets, and the Company is therefore exposed to market movements and short-term price volatility. This may lead to increased volatility in Net Asset Value and share price, which may not reflect underlying long-term value.

 

5.   Liquidity

The Company faces a risk in balancing the need to retain sufficient liquidity to meet ongoing operating costs and potential follow-on investment requirements during the realisation period, against the objective of maximising returns for shareholders through optimal capital deployment and distributions.

 

6.   Realisation strategy

There is a risk that the Company is unable to deliver its stated realisation strategy within the defined timeframe, whether due to adverse market conditions, asset specific challenges or execution constraints, resulting in delays, suboptimal outcomes or reduced returns for shareholders.

 

Going Concern

The Directors have adopted the going concern basis in preparing the Unaudited Condensed Interim Financial Statements.

 

In assessing the going concern basis of accounting, the Directors have assessed the guidance issued by the Financial Reporting Council and considered the Company's own financial position, the status of global financial markets, various geopolitical events and conflicts, the current macroeconomic climate and other uncertainties impacting on the Company's investments, their financial position and liquidity requirements.

 

At the period end, the Company had a current cash position of £28,166,000, a net current asset position of £14,754,000 and liquid listed investments amounting to £44,556,000.

 

On 24 September 2024, the Company agreed a £70,000,000 debt facility with Barclays Bank PLC which was fully drawn on 1 October 2024. Interest accrues at a market-rate margin plus the daily SONIA rate. The facility matures on 24 September 2026.  At the balance sheet date, the amount outstanding on the facility was £17,209,000 (31 March 2025: £70,000,000).

 

The Company generates liquidity by exiting investments. It uses liquidity by making follow-on investments, paying Company expenses and making returns to shareholders. The Directors ensure it has adequate liquidity by regularly reviewing its financial position and forward-looking liquidity requirements. The Directors' going concern assessment includes consideration of a range of likely downside scenarios which measure the impact on the Company's liquidity of differing assumptions for portfolio valuation, exits,  follow-on investment requirements, the repayment of indebtedness and Company expenses.

 

On 24 March 2026, shareholders approved a new investment objective to maximise the value of the existing portfolio over a three-year period from March 2026, with capital returned to shareholders as investments are realised. The Board subsequently announced its intention to transition to a self-managed structure. Notwithstanding these developments, the Directors expect that the realisation strategy will take at least three years to execute (through to February 2029) and therefore consider it appropriate to prepare the financial statements on a going concern basis for at least the next twelve months.

Taking all matters into account, the Directors have a reasonable expectation that the Company will continue in operational existence for at least twelve months from the date of approval of the Unaudited Condensed Interim Financial Statements and continue to adopt the going concern basis in preparing them.

 

Important events and financial performance

Highlights from financial year to date are as follows:

	Ordinary Shares
	31 March 2026
Highlights
Net Asset Value per share	133.94p
Share Price	81.40p
% of capital deployed	87%

 

The table below provides bi-annual performance information:

Date	NAV per share (p)	% change in NAV per share
3 November 2018	98.85
31 March 2019	108.41	9.7%
30 September 2019	113.33	4.5%
31 March 2020	108.65	(4.1)%
30 September 2020	160.97	48.2%
31 March 2021	206.15	28.1%
30 September 2021	251.96	22.2%
31 March 2022	211.76	(16.0)%
30 September 2022	147.79	(30.2)%
31 March 2023	130.02	(12.0)%
30 September 2023	134.65	3.6%
31 March 2024	147.46	9.5%
30 September 2024	141.26	(4.2)%
31 March 2025	152.62	8.04%
30 September 2025	171.65	12.46%
31 March 2026	133.94	(22.0)%

 

The total losses before taxation in the Unaudited Condensed Statement of Comprehensive Income for the six-month period ended 31 March 2026 were £198,542,000.

 

Further details of the Company's performance for the period are included in the Investment Adviser's Report on pages 4 to 15, which includes a review of investment activity.

Discount

As at 26 June 2026, the share price was trading at a discount of 44% to the last published NAV per share of 31 March 2026.

Related party transactions

Details of related party transactions during the six-month period ended 31 March 2026 are given in note 16 to the Unaudited Condensed Interim Financial Statements.

Statement of Directors' Responsibilities

 

The Directors confirm that to the best of their knowledge:

·      the Unaudited Condensed Interim Financial Statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU; and

·      the Interim Report (which includes the Chairman's Statement, Interim Management Report and the Investment Adviser's Report) includes a fair review of the information required by:

(a)   DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the Unaudited Condensed Interim Financial Statements, and a description of the principal and emerging risks and uncertainties for the remaining six months of the financial year; and

(b)   DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or the performance of the entity during that period and any changes in the related party transactions described in the last annual report that could do so.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website, and for the preparation and dissemination of the Unaudited Condensed Interim Financial Statements. Legislation in Guernsey governing the preparation and dissemination of the Unaudited Condensed Interim Financial Statements may differ from legislation in other jurisdictions.

 

Stephen Coe

Director

29 June 2026

 

Independent Review Report to Chrysalis Investments Limited

Conclusion

We have been engaged by Chrysalis Investments Limited (the "Company") to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2026 of the Company, which comprises the Unaudited Condensed Statement of Financial Position, the Unaudited Condensed Statement of Comprehensive Income, the Unaudited Condensed Statement of Changes in Equity, the Unaudited Condensed Statement of Cash Flows and the related explanatory notes.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2026 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity ("ISRE (UK) 2410") issued by the Financial Reporting Council for use in the UK.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Scope of review section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However future events or conditions may cause the Company to cease to continue as a going concern, and the above conclusions are not a guarantee that the Company will continue in operation.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim financial report in accordance with the DTR of the UK FCA.

As disclosed in note 2 (a), the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards as adopted by the EU.  The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

In preparing the half-yearly financial report, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Our conclusion, including our conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the scope of review paragraph of this report.

The purpose of our review work and to whom we owe our responsibilities

This report is made solely to the Company in accordance with the terms of our engagement letter to assist the Company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Dermot Dempsey

For and on behalf of KPMG Audit Limited

Chartered Accountants and Recognised Auditors

Guernsey

29 June 2026