Mercia Asset Management (Mercia) is to acquire the management of the three Northern Venture Capital Trusts (VCTs); Northern Venture Trust PLC, Northern 2 VCT PLC and Northern 3 VCT PLC, from NVM Private Equity LLP (NVM).
This will fulfil Mercia’s ambition to become the leading provider of complete, connected capital to regional SMEs. The deal will significantly increase Mercia’s Assets under Management (AuM) by c50 per cent to cGBP0.8billion. This will ensure that regional businesses will have even greater access to Mercia’s significantly enhanced investment capability and support during 2020 and beyond.
Partly funded by Mercia’s GBP30.0million Placing, which was announced today to the London Stock Exchange, this will be Mercia’s second acquisition in the North of England having acquired and successfully integrated specialist fund manager Enterprise Ventures Group in 2016. The acquisition of the Northern VCTs accelerates Mercia’s ability to achieve its three-year plan to double assets under management, move the Group to a profitable trading position and evergreen its balance sheet.
Mercia has an exceptional record in delivering investment returns based on its flexible capital solutions across four asset classes of venture capital, private equity, debt and proprietary balance sheet capital. Together with the Northern VCTs, Mercia can further dominate the regional venture capital market and offer the full life-cycle support from seed to scale up and beyond, including when investee companies may no longer qualify for VCT investment.
With strong regional investment track records and long-standing commitments to support fast- growing SMEs across the UK, Mercia and NVM have grown substantial portfolios. Both companies are also a close cultural fit and all nine members of NVM’s venture investment team are anticipated to join Mercia post completion, led by Charles Winward and Tim Levett, to maintain the team’s autonomy as they continue to build an attractive scale-up portfolio.
NVM’s Chair, Tim Levett, says: “Since founding NVM with Alastair Conn and Michael Denny in Newcastle upon Tyne over 30 years ago, NVM has always focused on regional investment and has grown from managing less than GBP20 million to over GBP400 million now. Mercia’s history is very similar and we believe we are a great fit and are sure that the NVM venture team will thrive and benefit hugely from the deal flow and infrastructure in Mercia. Charlie and I are passionate about building value for our shareholders and look forward to working with Mark Payton and the team at Mercia to ensure we combine the best of both groups.“
Mercia’s CEO, Dr Mark Payton, says: “We identified the Northern VCTs and NVM as the perfect fit for Mercia. This is an exceptional opportunity for Mercia, the transferring employees, the VCTs and the UK regions. This moves Mercia significantly closer to achieving our strategic milestone of managing GBP1.0billion in AuM by 2022 and makes us a profitable and valuable active asset manager. As a domestic UK-only investor providing substantial support alongside capital deployment, we’ve long recognised this need for ambitious SMEs in the UK regions outside of London. This acquisition demonstrates our long-term commitment to the regions, as well as being a testament to the success of our propriety complete connected capital model that makes Mercia the first choice for investors, investees and employees.”
