Mercia Asset Management aims to increase capital deployment to a record £250m in 2024

Mercia deployed a record £30m in Yorkshire and Humber businesses over the last financial year and stressed it had “dry powder” to continue supporting quality businesses.

Mark Payton, Chief Executive Officer of Mercia, commented:

"Mercia is now an established impact investor operating from a number of key cities across the UK, supporting ambitious founders who are seeking growth capital.

"During a year of caution from many in our sector, we have increased our levels of capital deployment, completed a successful acquisition and achieved positive fund inflows, with total AuM growing by c.50 per cent.

“Debt-free and with only sterling denominated assets, Mercia’s hybrid investment model of an ‘evergreen’ balance sheet with maturing assets, coupled to a highly synergistic and profitable fund management operation, puts us in a strong position as we face FY24 (full year 2024), with c.26 per cent of our AuM in unrestricted cash including £37.8m of our own cash reserves.”

Frontier Development Capital Limited, which was acquired in December 2022 added around £415m of funds under management. Mercia said the acquisition is performing in line with expectations. In a statement, Mercia said: “With strong regional roots and an established track record, Mercia is a ‘one stop’ responsible financial partner contributing towards the growth of the UK economy. Our physical presence in some of the key cities across the UK, including Birmingham, Manchester, Sheffield, Leeds, Bristol, Newcastle and London, results in sight of a significant number of investment opportunities in our sweet spot of ambitious business owners who are looking for between £250,000 and £10m of investment.

"The last 12 months have been tough for many, with the technology sector being largely out of favour with investors, impacting confidence and valuations. Despite the war in Ukraine, double-digit inflation, interest rates growing almost six fold, and marked domestic liquidity reductions, it is pleasing to report continued year-on-year growth.”

Commenting on outlook, Mercia said: “Whilst the sector that we operate in has generally seen liquidity pressures and material reductions in portfolio values, we see an opportunity during this current financial year to increase our investment activity by taking advantage of our strong, unrestricted liquidity of c.£378m across the group. Based on our physical presence across the UK and continued improvement in both the quality and volume of investment opportunities, we have set an ambitious target of increasing capital deployment to a record level of £250m in FY24.”