Knowledge-intensive Impact EIS Fund

Information Memorandum

An investor with IMPACT

Mercia was founded with the intention of addressing the regional funding gap and making a change in the British regions. When we began in 2010, 60% of all investments into the UK were made in London. Since then, the regional funding gap has only broadened – now, over 70% of all investments into the UK are made in London. Our aim as an asset manager is to establish some much-needed balance.

IMPACT: A step further than responsibility

Hundreds of new responsible investment funds come to market each year, but in terms of actively making a positive difference, they are not as effective as an impact fund. Investing in responsible businesses means investing in businesses which aim to do no harm. In contrast, impact businesses aim to provide solutions.

To make sure that our investments are effective and align with our mission, we’ll judge their qualitative and quantitative impact in three main ways:

1.

In relation to our three guiding principles that we developed from the UN’s sustainable development goals;

2.

By initially referencing our portfolio against the IRIS+ system (developed by the Global Impact Investing Network) for measuring, managing, and optimising impact;

3.

With our own approach to measurement, which we’ll refine in line with industry standards as recognition of impact develops in the year’s ahead.

Claim up to 30% income tax relief 

 

 

This Fund is HMRC approved and closes on 4 April 2022. Unlike with our standard EIS funds, which are unapproved, you can claim up to 30% income tax relief on EIS investments in the year they are invested or carry back to the tax year 2020/2021. For further details on the tax advantages of this fund please download our investment documents.

Investment that makes a DIFFERENCE

Our three guiding principles

Sustainable economic growth

  • Provide support for entrepreneurship and SME growth
  • Support and promote job creation and talent development
  • Focus on technological innovation

Reducing inequalities within our communities

  • Reduce inequalities across the UK and within UK regions
  • Empower and promote diversity and inclusion

Health & wellbeing for all

  • Promote health and well-being
  • Support R&D of effective and essential treatments and other healthcare services

These principles were our jumping-off point to define the three investment areas we’ll focus on for this fund:

Expected returns and tax advantages

This fund does more than provide financial returns; you’ll be a part of the solution to pressing societal and environmental challenges. Everything we raise toward this fund will be used to grow innovative businesses that resolve pressing social concerns.


Expected returns of 3x in 5-7 years (including
tax relief)

Significant tax advantages for eligible investors
The ability to invest more than you can in other EIS funds

How knowledge-intensive investment benefits investors and businesses

Our KI Impact EIS

Mercia has a rich legacy of knowledge-intensive investment. When we’ve surveyed our portfolio businesses, we found that many of them could qualify as knowledge-intensive. We were motivated to develop this fund, in part, because of our successful track-record with knowledge-intensive businesses in sectors like Life Sciences, Clean Technology, and Software.

Faradion

We have a significant record of investing in, and realising, impact businesses.

Faradion was the first company to develop a sodium-ion rechargeable battery that is cheaper and safer than the equivalent lithium-ion battery. Its batteries are recognised as an emergent technology that are a critical element of the solution for cheap and clean energy. When we exited in December 2021, the sale generated its investors a multiple of more than four times the original investment, which was equivalent to an IRR of 72%.

Download our investment documents

Download our investment documents, including our IM and KID to the read full details of our knowledge-intensive impact fund.

The IM brochure explores our impact fund in greater detail, how we measure impact, key features and differences with our other funds, expected returns and tax advantages. Our application details will also be included in this download.

Investments made by the Fund should be regarded as being of a long-term and illiquid nature, of significant and high-risk. Please read the full risk warnings in the documentation before applying.

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