Mercia Asset Management PLC has been appointed to manage three of British Business Bank’s new Midlands Engine Investment Fund II mandates.

They represent a total of £207 million in new funds under management.

The three new fund mandates represent important strategic progress, says Mercia, as it looks to scale its profitable third-party fund management operations.

The regionally focused specialist asset manager already has £1.5 billion of assets under management.

MEIF II – Equity ESEM LP will see £83m invested in the East Midlands and South East Midlands, managed by Mercia Regional Ventures.

MEIF II – Equity WM LP will see £80m invested in the West Midlands, managed by Mercia Regional Ventures.

And MEIF II – Debt WM LP will see £44m lent in the West Midlands, managed by Frontier Development Capital, a wholly owned subsidiary of Mercia.

A record year for Mercia in 2023 saw annual investments reach £281m as it backed 195 companies, with 77% of investments made outside of London.

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The funds will be managed and deployed by the group’s staff based largely across its three existing Midlands offices: Birmingham, Nottingham and Henley-in-Arden. They will be focused on supporting businesses across the entire East Midlands, South East Midlands and West Midlands, where the group has already established a strong track record in supporting SMEs.

BBB is expected to announce the award of new equity and debt fund mandates under its ‘Nations and Regions Investments’ Northern Powerhouse Investment Fund II initiative, towards the end of March 2024.

Dr Mark Payton, CEO of Mercia Asset Management PLC, said: “We are really delighted that, following a highly competitive procurement process, the Group has been selected by the British Business Bank to manage three new Midlands Engine Investment Fund II mandates, totalling £207m. 

“This is a strong vote of confidence in our investment track-record and staff, with the ability through our established regional footprint and networks to successfully deploy the capital that is needed to support exciting regional growth companies.

“We are passionate about investing in the UK’s regions to support the next generation of high-potential businesses and by growing our equity and debt funds under management, we can do this at greater scale and pace. 

“It is also pleasing that Frontier Development Capital, acquired by Mercia in December 2022, has been awarded its first Midlands Engine Investment Fund mandate.”

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