Mercia Fund Managers has been awarded a £23m proof-of-concept and early stage equity fund. The investment comes as part of the Midlands Engine Investment Fund and will cover the whole of the Midlands.
The fund is a collaboration between the British Business Bank and ten Local Enterprise Partnerships (LEPs) in the West Midlands and East and South East Midlands.
It is to be deployed across Mercia’s heartland of the Midlands and will be investing in rounds of up to £750,000, with additional funding potentially coming from Mercia’s EIS Funds into early stage and growth companies.
The finance provider has already invested around £50 million across the Midlands and has a portfolio of over 36 active equity investments in the region.
In addition, it expects the Fund to benefit from its existing university partnerships and will continue to strengthen its links with the wider innovation and research clusters across the region as a whole.
This is now the third new fund management contract which the British Business Bank has awarded Mercia in the past 12 months as it follows two Northern Powerhouse Investment Fund contracts, which the Group secured in February 2017.
“We are delighted that, following a competitive tender process, Mercia has been awarded this latest fund,” said Mercia CEO Dr Mark Payton.
“It is perfectly aligned with our focus on the underserved regions of the UK, our headquarters in the Midlands and of course alongside nine of our 19 university partners which are also in the Midlands.
“Our partnerships with some of the most forward-thinking academic establishments in the country offer a valuable pipeline of deal flow opportunities and will in large part be key to the success of this new fund.
“This latest contract will further strengthen the Group’s ability to generate attractive returns for both managed fund investors and the Group’s shareholders.”
The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020, the European Investment Bank and the British Business Bank.