RE: Madness of the MarketToday 07:21
AGT AVI Global Trust half year report is worth reading they have a large holding here;
https://www.lse.co.uk/rns/AGT/half-year-financial-report-16b04icqxgytx07.html
Chrysalis Investments
Classification: Closed-ended Fund
% of net assets: 6.0%
Discount: 48%
% of investee company: 15.9%
Total return on position HY26 (local): -32.0%
Total return on position [HY26 (GBP): -32.0%
Contribution (GBP): -254bps
ROI since date of initial purchase: 1.2%
Having been a substantial positive contributor over AGT's previous financial year, Chrysalis ('CHRY') was our second largest detractor in the first half of this financial year.
While this was in part due to the poor performance of now-listed Klarna and a write-down at wefox, the bulk of the decline was due to discount widening as the shares moved from a 29% discount to 48%.
Initially, this seemed attributable to the shares being caught up in the AI disruption/tech sell off. In our view, CHRY's portfolio companies have little in common with the software as a service ('SaaS') businesses in the market's firing line. While Starling Bank, CHRY's largest holding, has a SaaS-style subsidiary called Engine which provides banking software to third-party clients, this is still a nascent part of Starling's current value (although it certainly does have the potential to grow into a more meaningful value driver). Furthermore, we do not expect businesses with such deep specialist domain knowledge, operating in arguably the most regulated and risk-averse industry, to have their business models disrupted by "DIY" tools.
It is a matter of public record that we have been engaged with the Board on the company's future, and as such we were supportive of the proposals announced in February 2026 that would see the company adopt an orderly realisation policy with no new investments being made. These proposals were approved by shareholders at a meeting in late-March. Ahead of this, the shares took another leg down when it was disclosed that the Board has so far been unable to reach an agreement with the existing management team on commercial terms for them to continue in their roles and that, if no agreement is reached, the company will adopt a self-managed structure. In the event of such an outcome, we are confident that the board has the necessary skills, mindset and experience to oversee the realisation process, particularly with the recent appointment of an AVI-proposed director, Sam Dobbyn.
We see scope for highly attractive prospective returns from here.
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