Chrysalis Investments Limited has announced that it is working on a significant revision to its existing structure in order to maximize value for its shareholders. The company conducted a shareholder consultation, which provided useful insight into issues of capital deployment, management remuneration, and the company's relationship with Jupiter Investment Management Ltd. The consultation covered approximately 60% of the non-Jupiter related issued shares. The company intends to release relevant shareholder documentation, including a final proposed Capital Allocation Policy, at the same time as the year-end accounts are published and the date for the Annual General Meeting (AGM) is set. Shareholders will have the ability to vote on the continuation of the company and the revised performance fee arrangements under the proposed new management arrangements.
The company's board has been overseeing the investment management agreement and has decided to continue to be run by the existing investment team. The board has worked to ensure the best processes are in place for the company, including the appointment of an independent valuation committee, taking the AIFM responsibility in-house, and tailoring risk reporting to the product. However, there are still outstanding issues that need to be resolved, primarily related to the provision of sufficient dedicated resources for the management team and the reduction of various Jupiter-managed holdings in Chrysalis.
The board has reached an agreement with Jupiter and agreed Heads of Terms with the Managers to redraw the structure under which investment advisory services will be provided. The Managers will leave Jupiter to provide advisory services to the company from a new entity. The board believes this move is consistent with feedback from the recent shareholder consultation, which demonstrated strong support for the Managers and their efforts in creating and running Chrysalis. The details of these arrangements will be set out in a forthcoming shareholder circular.
The proposed new arrangements include the termination of the existing management contract with Jupiter, a reduction in the management fee, the release of the Managers from their employment contracts and restrictions, and the entry into a tripartite contract with a new investment adviser formed by the Managers.