Buy-now-pay-later group Klarna has weighed heavily on closed-end fund Chrysalis (CHRY ) but that may be about to change after the unquoted financial services disruptor reported its first profit in three years and boss Sebastian Siemiatkowski said it was getting ready to float.

Klarna, which makes up 6.4% of Chrysalis’ £815m portfolio of pre-flotation ‘unicorns’, suffered a bruising $800m write-down in its valuation last year. That was a major contributor to the fund’s 41% decline in 2022, made all the more controversial by contributing to the huge performance fee that Jupiter and the fund’s managers were previously awarded.

However, the tide may be turning with the Swedish fintech company last week reporting a 17% year-on-year revenue growth in the second quarter, and a reduction in operating losses. 

Siemiatkowski, founder and chief executive of the group which has 150m customers worldwide, said it also made a ‘small profit in May’, the first time it has posted a profitable month in three years.

‘We feel very confident that we’ll be posting a profitable quarter very soon, and then eventually also a full profitable year,’ he told the Financial Times.

This confidence extended itself to plans for an initial public offering (IPO), which Siemiatkowski said Klarna is ready to do once market sentiment improves.

‘From an IPO perspective, the requirements [for floating] have been met,’ he told the FT.

‘So now it’s more market conditions. It’s more a question of us getting ready and [preparing] the organisation.’

Klarna’s optimism comes as Chrysalis looks for a catalyst, such as a successful flotation by one of its holdings, that will revive investors’ confidence in the fund’s valuations.

Its shares have halved in the past three years and trail at a wide discount of around 48% to net asset value (NAV), although fund managers Richard Watts and Nick Williamson recently reported a second-quarter recovery of their own with NAV up 5.3%, its first advance since September 2021. 

The market is waiting for more specific news with the shares broadly unchanged at 70.6p today, down 8% this year.