Chrysalis reaches legal settlement with Revolution Beauty

The late-stage private equity fund receives a settlement of less than £6.1m from the AIM-listed company after mounting a £45m legal claim last year.

Chrysalis Investments (CHRY ) has reached a settlement with former portfolio holding Revolution Beauty after threatening a £45m legal claim against the make-up company last year.

The private equity listed fund said it had received a ‘non-material sum’ of less than 1% of its £613m market capitalisation, meaning less than £6.1m, in a confidential agreement with Revolution Beauty, marking the ‘full and final satisfaction of its claim’.

Neither party has admitted any liability. 

Chrysalis had outlined a £45.2m claim against Revolution in April 2024. That comprised £39m plus a further £6.2m for consequential losses against the company, which it sold in late 2022 at a nearly 90% loss on its investment. 

Chrysalis chair Andrew Haining previously said that information provided to the fund when it first bought shares ‘contained misstatements and material omissions’ and therefore the fund had a potential claim for ‘deceit, negligent misstatement, and/or misrepresentation’.

Shares in Beauty Revolution were suspended at the beginning of September 2022 after it failed to publish its audited results. An independent investigation was ordered that revealed dubious business practices and undisclosed loans. The shares resumed trading the following June.

Chrysalis shares fell 2.2% to 106p when the news was announced on Thursday, extending the discount to 25%. However, over the last 12 months, the shares have soared nearly 39% as the fund made a start on its promised £100m capital return to shareholders via buybacks, using proceeds from the exits of Featurespace and Graphcore.

Managers Richard Watts and Nick Williamson said recently that if the planned US flotation of top-three holding Klarna this quarter lifts cash levels above £200m, they would look to invest in new private companies.