Growth Street backer Chrysalis Investments has said it is prepared to take a lower wind-down value for the closing peer-to-peer lender after it returned all its funds to investors.
P2P business lender Growth Street announced last month that its retail investors are set to receive their balances back in full as it prepares to close.
The platform announced plans to close in June 2020 and was in the process of getting its loanbook repaid, known as a resolution event.
It will enter a “solvent wind-down” once all its finance facilities are repaid.
But Chrysalis Investments, which made a £12.6m investment in Growth Street in 2019, said the payout increases the risk of a lower wind-down value, which would hit the value of the fund’s portfolio.
“A decision was taken to accelerate returns to investors that funded the Growth Street platform, such that they received full recoveries,” a note in the Chrysalis Investments annual report said.
“While this decision modestly increases the risk of a lower wind-down value for Chrysalis Investments, the investment adviser believes ensuring no losses for retail customers was the responsible course of action.”
Chrysalis Investments’ annual report showed the value of its Growth Street holding was worth £1.2m as of the end of September 2020.
Growth Street makes up just 0.2 per cent of its assets.
Its largest holdings as of the end of September 2020 were e-commerce company The Hut Group and buy-now-pay-later fintech Klarna.
The private equity fund’s net asset value per share was up 42 per cent annually to 160.97p.
Growth Street entered a 90-day liquidity event in March last year to stop withdrawals and keep funds invested.
It then decided to close to retail investors in June and focus on getting its loanbook repaid as part of a resolution event.
However, efforts to secure institutional backing have since failed, so the platform has instead decided to close once loanbook repayments are complete.
The lender had previously announced a restructure and layoffs in November 2019 which also included the departure of its founder and chief executive Greg Carter.