Shares in private equity investment trust Chrysalis Investments (CHRY) continued to fall following reports in the Wall Street Journal that investee company Klarna is attempting to raise approximately $650 million from existing investors at a significant discount to previous funding rounds.

Buy now, pay later provider Klarna is the second largest position in Chrysalis’ portfolio and accounts for approximately 19% of the trust’s net asset value.

Wall Street Journal reported that in its latest funding round Klarna’s valuation could decline to $6.5 billion. This compares with a previous funding round inJune 2021 that valued the business at $45.6 billion.

Assuming the latest reports are accurate, the new funding round would lead to a reduction of 32p from Chrysalis’s March net asset value of 212p.

Over the past month shares in Chrysalis have fallen by nearly 30% and are down by nearly two thirds over six months.

Jupiter (JUP), which manages Chrysalis, is facing growing criticism given that 12 of itsfunds had invested in the investment trust.

Shares in many private equity trusts have been under pressure this year as investors fear the value of unquoted holdings will be marked down.

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