'Structural drivers of demand': Mercia Asset Management says regional business funding model in strong place
Regional business investor Mercia Asset Management has said it is in a strong position to benefit from different economic drivers as it posted its latest annual results.
The organisation, which has offices in Leeds, Hull and Sheffield and provides venture capital, business loans and private equity to growing businesses, fell to a £7.7m pre-tax loss for the 12 months to March 31, 2026 after recording a £5.4m pre-tax profit the previous year.
Revenue was down from £35.2m to £34.1m but EBITDA rose from £7.6m to £8.1m.
Mark Payton, Chief Executive Officer of Mercia, said: “We are pleased to announce a positive set of full year trading results. We are continuing to successfully deliver against our strategy to drive increases in assets under management (AuM), EBITDA and margin. We have attracted new and expanded mandates, including increases to existing funds, effective from early April 2026, alongside our successful VCT and EIS fundraises, growing Mercia’s AuM to c.£2.2billion today.
"The unrealised fair value movement in the direct investment portfolio largely reflects external comparable valuation multiples, which have been impacted by current market sentiment.”
Since the start of April, Mercia has secured more than £150m of additional allocations into its regional venture and lending funds, and a new allocation of around £33million for deployment against the government’s eight industrial sectors.
Ian Metcalfe, non-executive chair, said: “The external environment remains uncertain. Despite this, the structural drivers of demand for UK regional private capital are strengthening: succession-driven M&A within owner-managed SMEs; the continued need for scale-up capital for high-growth businesses; supportive Government policy such as the Mansion House Accord and the UK growth agenda; and a notable rise in institutional and local government pension scheme appetite for place-based, domestically-focused investment. Each of these drivers plays to Mercia’s model.
"Our focus on building a profitable, predominantly recurring revenue fund management operation continues to deliver. Scale is now translating into increasing margin; investment performance across the asset classes is being sustained; and the fundraising pipeline is healthy.
"We continue to manage the balance sheet prudently, and the Group’s financial strength gives us more options - to invest in our platform, to pursue carefully chosen inorganic growth and in due course, to return further capital to shareholders.”