The six month period to the end of July has been one of great market price volatility.

This has not impacted our investment approach. We are long-term growth investors who seek to value opportunities based on our assessment of their fundamental business prospects. Our strategy is to apply this consistently through all market environments, in the belief that this is the best path to long-term outperformance for Schiehallion shareholders. We have held to that thus far and will continue to do so.

This price volatility has impacted our portfolio carrying values. The NAV total return of the ordinary shares and the C shares during this period was -17.6% and -11.0% respectively. This is in line with our carrying valuations methodology, a reiteration of which is included in this interim report. Both the Company's ordinary and C shares each moved from trading at a premium to trading at a discount, as market sentiment turned against growth stocks.

Market price volatility has also had an impact on the opportunities we have been seeing. Companies are reluctant to raise money if this involves doing so at a lower valuation. As a result, many businesses with the option to defer capital raising have done so. We have also seen a growth in the number of convertible rounds taking place, many of them entirely with insiders. The result was an adverse selection effect, with many of the best companies selecting to postpone significant fundraises. This only started to abate towards the end of the period.

We only made two new additions during the period: Kepler Computing and Merlin Labs. These were both introductions through our relationship network. Both companies also fit into the subset of the portfolio that contains earlier-stage companies, and as such received smaller initial investments. Given the market backdrop, more team time has been given to working with holdings. A subset of our portfolio holdings had been planning on raising capital through the period. Others have had their operations impacted by the Russian invasion of Ukraine, and the energy market turmoil caused by the ensuing sanctions.

Whilst the vast majority of Schiehallion – by capital and by holdings – is made up of late-stage, revenue and often cashflow-generating, rapid growth companies, we have always had some room for truly exceptional earlier stage opportunities. Roughly 10% of the portfolio is now in these companies. We do not anticipate significantly increasing our allocation to early-stage companies from here. Here again our approach has been consistent. The management of our holdings know that further capital support is not unconditional and must be underpinned by continued thesis conviction and appropriate upside. Where these have not been present, we have declined to participate in follow-on financings. In other instances, we have taken the opportunity to add to holdings at attractive prices. We have topped up our positions in Northvolt, Solugen, Tempus Labs, Daily Hunt (which, as mentioned in last year's interim report, can only be held in the ordinary share portion of the portfolio) and Affirm.

Given the market backdrop, more team time has been given to working with holdings. A subset of our portfolio holdings had been planning on raising capital through the period. Others have had their operations impacted by the Russian invasion of Ukraine, and the energy market turmoil caused by the ensuing sanctions.

Here again our approach has been consistent. The management of our holdings know that further capital support is not unconditional and must be underpinned by continued thesis conviction and appropriate upside. Where these have not been present, we have declined to participate in follow-on financings. In other instances, we have taken the opportunity to add to holdings at attractive prices. We have topped up our positions in Northvolt, Solugen, Tempus Labs, Daily Hunt (which, as mentioned in last year's interim report, can only be held in the ordinary share portion of the portfolio) and Affirm.

It is worth noting that our addition to Affirm has been done in public markets. A key part of Schiehallion's differentiated access comes from our ability to support companies even after they list. We reviewed Affirm following a period of extreme share price weakness and took the opportunity to add to our holding from within the C share portfolio.

We have also added a new team member: a global investment analyst, based in Shanghai. We continue to see differentiated deal-flow in China, with roughly 9% of the current invested capital being into Chinese companies. Our admiration for the Chinese innovation economy is balanced with an awareness of the geopolitical risks. As such, it has been key for us to design this role from the outset as a globally-oriented position.

The period's volatility has reinforced our conviction that Schiehallion's structure helps us behave in a differentiated way through the market cycle. We have seen forced private market selling from crossover investors running open-ended and/or highly-levered structures, and have felt the benefits of the support of our public market colleagues in helping us make calm and long-term decisions around Schiehallion's public market holdings.