Mercia AM secures £207m in British Business Bank contracts for Midlands investments

Mercia Asset Management has gained a £207m mandate for three new funds from the British Business Bank.

The specialist asset manager will be managing the Midlands Engine Investment II funds, after winning the procurement process.

The firm said the move represented “important strategic progress for Mercia, with scaling its profitable third-party fund management operations a key ‘Mercia 20:20’ objective”.

The three funds, focusing on the East Midlands, South East Midlands and the West Midlands, will be managed by Mercia and Frontier Development Capital, a subsidiary of Mercia.

The two funds managed directly by Mercia will be equity funds, containing £83m and £80m, while the debt fund will be managed by Frontier.

The funds will be managed and deployed by the firm’s staff based largely across its three existing Midlands offices in Birmingham, Nottingham and Henley-in-Arden.

The British Business Bank is also expected next month to announce the award of new equity and debt fund mandates under its ‘Nations and Regions Investments’ Northern Powerhouse Investment Fund II initiative.

Mark Payton, CEO of Mercia Asset Management, said: “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.”