The Mercia EIS Fund is a diversified venture capital portfolio, wrapped within an EIS fund, which offers strong downside protection and the upside is not limited by capital gains tax.
We aim to triple invested capital in five to seven years, including tax reliefs. We will achieve this by investing at seed and early stage, expecting failures and targeting high multiple returns in some companies (10x or more).
The Mercia group is one of the largest (£800m) and most respected early-stage investors in the UK, and we currently have £300m to invest. We focus on investing outside of the South East of England, as we find much improved valuations, and we have a track record of exits (returning over £300m).
The Mercia group is focused on realising value.
The natural exit window in the UK is between £25m-£50m, and we invest at a seed or early-stage that enables Mercia to achieve the multiples required to deliver the portfolio level returns in 5-7 years.
There are two standard exit routes for EIS managers, exiting via
Mercia aims to exit companies in a valuation range of between £25m-£50m, which is the most common in the UK, but we have built big companies (BluePrism £1.8billion in Sept 2018). There are already rapidly growing companies in the EIS portfolio which could exit for over £50m, delivering an exit of over 25x cost, providing fund-level returns well in excess of our target.
Company | Date of exit | Share purchase price | Share exit prices | Total return (net of reliefs) |
---|---|---|---|---|
LM technologies | July 2016 | £0.66 | £3.18 | 4.8x (6.9x net) |
BluePrism (EIS qualifying) | March 2019 (final) | Equivalent of £1 | Equivalent of £104 (blended) | 104x |
Allinea (EIS invested) | 2017 | c£1 | c£26 | 26x |
Milkalyser SEIS | Jan 2020 | £50 | £54.49 | 1.1x |
Native Antigen Company | July 2020 | £408 | £3,512.42 | 8.6x (12.3x net) |
Mercia Asset Management has £0.8billion AuM and is recognised as the leader in UK focused, early-stage technology investments.
Fee | Investor (including VAT) | Investee Company |
---|---|---|
Initial fee | 1.2% | Variable, as negotiated with company (average 2.5%, but waived in many cases) |
Annual fee | 2.1% (payable for six years) | n/a |
Performance fee | 20% over £1 | n/a |
Other fee information | 0.25% annual custodian fee (payable for six years), and 0.35% transaction fee | Board directors’ fees, as negotiated with company |
Alternative Investment Fund
Triple invested capital, including tax reliefs
Venture capital EIS with leading UK technology investor
Various technology sectors
12-15 companies
Custodian: The Share Centre Limited Receiving Agent: Woodside Corporate Services Limited
Nominee: Share Nominee Limited
An investor qualifies as an High Net Worth investor if they have
(a) An annual income to the value of £100,000 or more;
(b) Net assets to the value of £250,000 or more. Net assets for these purposes do not include:
(i) the property which is their primary residence or any loan secured on that residence;
(ii) any rights under a qualifying contract of insurance within the meaning of the Financial
Services and Markets Act 2000 (Regulated Activities) Order 2001; or
(iii) any benefits (in the form of pensions or otherwise) which are payable on the termination of their service or death or retirement and to which they are or (or their dependants are), or may be, entitled.
An investor qualifies as ar Self-Certified Sophisticated Investor if at least one of the following applies:
a) they are a member of a network or syndicate of business angels and have been so for at least the last six months prior to the date below
b) they have made more than one investment in an unlisted company in the two years prior to the date below
c) they are working, or have worked in the two years prior to the date below, in a professional capacity in the private equity sector, or in the provision of finance for small and medium sized enterprises
d) they are currently, or have been in the two years prior to the date, below a director of a company with an annual turnover of at least £1 million