Chrysalis Investments Reports 21.5% NAV Growth and Proposes Asset Realisation Strategy

Chrysalis 2025 results: big NAV jump, deeper discount, and a pivot to realisations

Chrysalis Investments has posted a strong year on paper, driven by a re-rating of Starling and a chunky share buyback. The twist: the Board now wants shareholder approval to shift the strategy toward an orderly realisation of assets over three years, with no new investments. Here is what that means for retail investors.

2025 at a glance: key numbers you should know

Metric	30 Sep 2025	Change year-on-year
NAV per share	171.65p	+21.5% (+30.39p)
Share price	121.20p	+29.9%
Discount to NAV	29% (year-end)	Approx. 37% now
Total net assets	£874.6 million	+4.1%
Realisations	£130.7 million	Featurespace £80.0m, InfoSum £49.8m
Buybacks in year	£85.9 million	~9p NAV accretion
Total returned to date	£102 million	post year end
Total liquidity	£236 million	Gross cash £118.1m
Net liquidity	£166 million	after £70m term loan
Profitable portfolio	86%	vs 76% prior year

What drove the NAV: Starling, wefox and buybacks did the heavy lifting

The 21.5% NAV per share rise to 171.65p was powered by three things:

• Starling added about 28p per share thanks to a stronger UK bank and the first explicit valuation for its SaaS platform, Engine by Starling.
• wefox contributed roughly 6p after a recapitalisation and pivot to an asset-light MGA model, where Chrysalis also improved its position in the capital structure.
• Buybacks did real work: around 9p per share accretion, equating to roughly 7 percentage points of the NAV uplift.

Offsetting this, Brandtech and Deep Instinct were notable detractors amid a softer ad-tech backdrop and slower conversion of cybersecurity pipeline, respectively.

Discount watch: up 30% on the year, but the gap has widened again

The share price gained 29.9% to 121.20p, narrowing the discount to 29% at the year end. Since then, the discount has moved back out to approximately 37%. In plain English: the market still isn’t giving Chrysalis full credit for the underlying valuations.

The buyback has helped – £85.9 million deployed during the year, taking the total returned under the programme to £102 million post year end. Buying in shares at an average of roughly 101p when the NAV is 171.65p makes financial sense and boosts per-share value.

Realisations and liquidity: cash raised, pipeline primed

Chrysalis realised £130.7 million, chiefly from:

• Featurespace to Visa for £80.0 million (a further £9.2 million expected on escrow release).
• InfoSum to WPP for £49.8 million.

Liquidity is solid. Total liquidity stood at £236 million, including £118.1 million of gross cash. Net liquidity was £166 million after the £70 million term loan, and £10 million has already been repaid post year end. Importantly, Klarna listed on the NYSE in September; the stake was worth approximately £115.3 million at year end, though it is locked until 10 March 2026 and has fallen by about 18% since year end.

Strategic shift: proposed orderly asset realisation over three years

The Board is proposing amendments to the Investment Policy to run an orderly realisation programme of the portfolio over about three years, with no new investments. The aim is to maximise capital returned to shareholders while avoiding forced sales. A circular is expected in January 2026, with an EGM early in 2026.

My take: this is effectively a managed run-off, not a fire sale. If shareholders approve, expect a steadier cadence of disposals and ongoing buybacks or returns – potentially a catalyst for the discount to narrow if execution is tidy and markets stay receptive.

Portfolio concentration: Starling leads, Klarna provides optionality

Chrysalis is now highly concentrated, which is a double-edged sword. Approximately 74% of NAV sits in three assets and 85% in four. That heightens outcome risk, but it also means progress at the top holdings really moves the dial.

Top holdings	Value (£m)	% of NAV
Starling Group Holdings	£406.6m	46.5%
Smart Pension	£123.4m	14.1%
Klarna Group PLC	£115.3m	13.2%
wefox Holding AG	£91.5m	10.5%

Quick take on the big four:

• Starling: solid financials with four consecutive years of profitability, improving risk controls, and momentum at Engine, including a 10-year Tangerine Bank contract post year end.
• Smart Pension: profitability has inflected and Keystone (its tech platform) is a second engine; potential tailwinds from UK pension consolidation.
• Klarna: now listed, profitable in multiple quarters during 2025, strong US growth and partnerships, but post-IPO share price weakness is a near-term headwind.
• wefox: turnaround underway, refocused markets, lower capital intensity; the carrying value reflects its improved position.

Capital allocation: disciplined follow-ons, not new names

In line with the standing commitment, there were no new investments. Follow-on capital of £31.8 million supported wefox (£16.6 million), Deep Instinct (£4.7 million) and a secondary purchase of Klarna (£8.2 million), alongside a de minimis top-up in InfoSum pre-sale. This is consistent with stabilising the core and preserving options value while buybacks return capital.

Positives and watch-outs for 2026

What looks good

• Strong NAV progression (+21.5%) with clear attribution: Starling, wefox and buybacks.
• Cash generative year: £130.7 million realised; total liquidity £236 million; net liquidity £166 million.
• Buybacks working as designed – around 9p accretion and £102 million returned to date.
• 86% of the portfolio profitable on an underlying basis, up from 76%.

What to monitor

• Concentration risk: with 74% in three assets, execution at Starling and Smart really matters.
• Discount drift: back to roughly 37% post year end. The proposed realisation plan needs to deliver to close it.
• Klarna volatility: the stake is liquid from March 2026, but fintech sentiment has been wobbly.
• Detractors: Brandtech and Deep Instinct need to stabilise; Deep Instinct remains loss-making.

Bottom line: value building, now comes the harvest

Chrysalis has done a lot right this year: raised cash at good prices, strengthened the balance sheet, bought back stock at a discount and saw genuine NAV uplifts from its leaders. The proposed shift to a three-year, no-new-investments realisation policy is a pragmatic response to a persistent discount and the portfolio’s maturity profile.

If the Board gets shareholder support and sticks the execution – steady sales, thoughtful buybacks, and no value-destructive disposals – the discount should logically narrow. The caveat is concentration. 2026 will be all about delivery at Starling and Smart, and what Chrysalis decides to do with Klarna as the lock-up ends.