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26% uplift since 31 March 2020. is impressive but not unexpected given the performance of listed stocks in similar sectors.
https://www.merian.com/wp-content/uploads/2020/09/2020.09.01-mcicl-announcement-nav-as-at-30-june-2020.pdf
gewillia, sadly I am ignorant of quantitative numbers and valuations. There is also a mistake with the Factsheet that claims MERI had a 14% allocation to THG. The Hut Group Limited on 20/12/2018 and October of the following year acquired a total of £29,648,000 valued at £32,762,000 makes up 9% of MERI that had a NAV of £365,873,000. I am not sure if you have enough information to calculate a NAV increase.
Numbers are not my thing... I use qualitative factors to determine the worth of a company like ambition, the usefulness and usability of the products perhaps even how "cool" a product is.
Source:
https://www.merian.com/wp-content/uploads/2020/06/merian-chrysalis-investment-company-ltd-interim-accounts-to-31-march-2020.pdf
Thanks for posting this, Mr.Flibbles. I see from 2018 that Merian started with a £9m investment, which had risen to over £29m by the latest interim results.
Do you have any idea what those funding rounds valued THG at? That would give us some idea of how much of a gain this IPO represents. The story of a £4.5 billion valuation has sure put a rocket under the SP.
British e-commerce company The Hut Group Ltd. said it plans to sell 920 million pounds ($1.2 billion) of new shares in an initial public offering, breathing life into an IPO market that has seen little activity this year.
https://ca.finance.yahoo.com/news/hut-group-planned-1-2-071518612.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAEOZ96G9nl8ZGKjhCUs5fjvEOF8y-nNrFryqMLJb3oHH4cNZ-eEwkQDSZz_ufOT-mEkbiDhQgxWcUNhkEtF_unEuNoMq_UvF8-NyXX7HPo5R-LUldJEEEtfVGnHEsGvHYpxqAf31zn4F8_lzOdkVdH-PH-ECDWjHguetQjx8rR8t
Starling Bank has bucked the trend: It's back on track to turn a profit by the end of this year.
https://www.wired.co.uk/article/starling-bank-profit-coronavirus
Looks like I profit taken a little too soon!
:-(
Reduced by 50%. MERI is now trading at a hefty premium to NAV now. You can get better value in a similar fund GROW where I have moved most of the funds. I will wait for the next NAV report before I think about adding back.
And if not why not? I have just not got round to it. It is on my list of things to do as a holder of MERI.
Rudderless because at the time I had not yet received get the RNS 29th Jul 2020 and I had thought you had been commenting from a press report. I particularly like this bit:
Richard Watts, portfolio manager, adds: "The sale represents a significant moment for Merian Chrysalis. In the Interim Report we expressed our aspirations to move into the Company's second phase, the "growth" phase, with an eye on phase three - "realisations" - in due course. This transaction has allowed us to deliver on both of these goals: it has driven NAV progression, and also demonstrated our ability to recycle capital to fund future investments in the portfolio."
Jeez, Mr.Flibbles, in the highly unlikely event that I am the most knowledgeable on MERI here, then we're all in trouble! Thank you for advising that Draper Esprit (what a strange name) is the vendor. My, they did well, doubling their cash in less than 3 years.
Forgive my being slow on the uptake, but are you saying that Richard Watts has bought into GROW through MERI, or was it through some other Jupiter fund?
You're right about the collection RW has put together. I too have high hopes over the next five years, but I'm wondering why you opine that "Meri feels rudderless"? Surely their strategy is to now hold through the growth phases and then liquidate at the IPO stages, reinvesting in more nursery stocks, as they go along. What have I missed this time, please?
Hi Gewailla, you may be the most knowledgeable on MERI here. Richard Watts clearly has other priorities to his new boss and managing his new Jupiter fund than to help us. Co-incidentally it was AIM-listed Draper Esprit (GROW) who sold out of TransferWise as part of this deal and Richard has added GROW to his Jupiter fund. While I was not confused I enjoyed the NAV not being updated officially as I am accumulating equity since C19 hit. MERI indeed feels rudderless. But what a collection of stocks Richard has put together. Far better in my opinion that all other listed private equity.
I have a pet hate over management who put out the vaguest of RNS and oblige me to go digging in previous RNS and accounts to establish the clear, concise truth over what has just happened. To hide bad news is to be expected, but Meri does it even with good news.
Yesterday's very welcome announcement about a profitable part-sale of the Transferwise holding talks only of a £20 million cash receipt. The result is that Alliance News is trumpeting a sale of the entire holding, which is clearly wrong, but you can't blame them for being misled, and, in turn, misleading existing shareholders, who dig no deeper.
Here's my read on what really happened and I'd be really grateful if anyone else, more skilled in analysis, would correct any errors:
The results to 31/03/20 show total cost of Transferwise holding at £55.5 million, representing 18% of total net assets of £288m. The partial sale represents a 1.7 times uplift on average cost. IE. £55.m becomes worth £94m. The sale proceeds of £20m, reduce the remaining holding value to £74m. The average purchase cost of this sold slice was almost £12m (20 divided by 1.7), so reducing the net cost to £44m.
A delightfully profitable investment, but why can't the management be arsed to give us the full facts, instead of acting like bashful virgins? An update overall value for the entire portfolio would be nice too, given the number of recent new and increased investments. The old, but still less than 3 months old, number of 108p NAV per share, updated to 117p, is possibly quite understated.
There is an RNS to say that MERI is trimming some of these TransferWise holdings and this should add 9p to NAV.
MERI trades at a premium to NAV and I have been selling. However, it is becoming clear that the NAV has not kept up with the listed sector typical of PE and the TransferWise deal. For this reason, I am adding again thanks to the large seller who has kept the premium to NAV acceptable.
A welcome sell for those in accumulation:
23-Jul-20
16:24:46
123.80
415,941
Sell*
122.00
128.50
£514.93k
Very interesting thanks ..
"We’re not lending to riskier consumers… we’re accepting [more], better quality customers,” Griffiths explained.
https://sifted.eu/articles/klarna-coronavirus-boost/
https://www.ft.com/content/0733e936-062c-11ea-9afa-d9e2401fa7ca
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https://www.ft.com/content/0733e936-062c-11ea-9afa-d9e2401fa7ca
Microsoft has said users of its Azure cloud service will have access to specialised chips designed to boost artificial intelligence applications, made by the UK chipmaker Graphcore.
The $1.5bn chip company, based in Bristol, is the first start-up whose AI chips will be available at this scale, giving it an edge in the race to build a new generation of specialised chips.
“This [move] is very significant for us because it means anyone on the planet can go to Azure and use our technology to build out their systems,” said Graphcore’s chief executive Nigel Toon. “It’s a massive step for the availability of our technology and a testament to its level of maturity.”
Graphcore is building new hardware to run intensive, power-hungry applications that every high-tech industry, from automotive to health, security and manufacturing, will need to run when they integrate machine learning into their systems.
The widespread adoption of technology will allow computers to spot patterns and make discoveries from large data sets. The market is crowded with companies including Intel, Nvidia, and Cerebras and giants such as Google, Amazon and Apple, who are all working on AI-optimised chips.
Graphcore’s chip, which it calls an “intelligence processing unit”, can be used to train machine learning algorithms, and the start-up claims its systems are 10 to 100 times faster than existing chips for applications such as image recognition, voice processing and video analysis.
So far, early customers have claimed big improvements to their AI-driven work since using Graphcore chips. European search engine Qwant said it had experienced a 3.5x speed-up in its image search application since using Graphcore chips, while hedge fund Carmot Capital said it saw a 26x speed up on some of its financial analysis applications.
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Read more at https://www.ft.com/content/0733e936-062c-11ea-9afa-d9e2401fa7ca
Starling Bank looking to raise up to £35m with two new BCR grants
https://www.altfi.com/article/6778_starling-bank-looking-to-raise-up-to-60m-with-two-new-bcr-grants
"People close to TransferWise said the share sale was being undertaken at a $5bn valuation - a 30% premium to an almost identical transaction just over a year ago." https://news.sky.com/story/transferwise-hits-4bn-valuation-as-employees-cash-out-12022305
It appears MERI is about to help Merian's open-ended OEICS get out of their £90 million illiquidity jam, by buying their interests in a boat-load of unquoted securities "The Transaction".
Thus filling their OEICS with cold cash and ensuring they don't suffer from a 'Woodford Moment', should their investors get nervous, when Woody's funds are finally reinstated and promptly liquidated by a herd of investors charging for the door, sometime next year.
I do hope there's an independent valuation to protect our interests. Meantime this little bail-out exercise has seen MERI's price collapse from £1.37 on August 15th to £1.20 today. Thanks guys!
Already 60% invested in some very promising companies. Graphcore my favourite, at the forefront of AI.