Mercia Asset Management (Mercia) was founded in 2010 and listed on the AIM market of the London Stock Exchange in Dec 2014. It provides venture capital, private equity and debt investments to mostly regional (ex-London) UK businesses, investing between £100k and £10m. It manages c £1.7bn of funds for third parties and invests c£200m of its own capital alongside these funds.

26 Nov 2024

A rarity in the sector: Revenue +19%, EBITDA +34%

H1-25 (to 30 Sep 24) saw further progress of the Mercia 27 strategy which targets £3bn AUM (FUM + proprietary capital) and c.£10m EBITDA by FY27.

AUM was up 26% y-o-y and 1% over H1-25, following a series of large mandate wins in late FY24. Mercia is one of very few London-listed asset managers with positive net flows over recent periods.

H1 revenue was up 19% y-o-y and EBITDA +34%, a margin of 20.8%, up from 18.4% in H1-24. This is likely to ratchet up over the longer term as the business scales. PBT increased 75% and basic EPS increased 37%.

Our valuation is sum-of-the-parts based coming out at 52p, and we see no reason to discount the direct portfolio NAV given Mercia’s record of exits at a premium to holding NAV.

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