The following article was originally published in IFA Magazine on 6th March 2014, and was also covered in Angel News:
Talon Golding, Sales & Investor Relations Manager at Mercia Fund Management, says the door will be closing shortly on the Mercia Growth Fund 3
With the end of the tax year drawing ever closer, there is limited time for investors to take advantage of the tax efficient opportunities on offer. One EIS provider soon to be closing their doors to new investment is Mercia Fund Management with their latest EIS & SEIS hybrid fund, Mercia Growth Fund 3.
“It has been a busy year for Mercia,” says Talon Golding. “We are currently completing on the final investments within our last fund, Mercia Growth Fund 2, after making 19 new investments over the past 12 months, whilst our latest fund is expected to close for new investment within the next four weeks following increased demand from investors.”
A recent EIS focused report highlighted that the most successful industries, in terms of targeted investment and return on investment, for EIS capital include Recreational Services, Medical and Educational Services, Real Estate and High-Tech. Mercia Fund Management “MFM”, established in 2010 and with over £19m under active management, is a provider in equity provision in two of these sectors (medical and high technology).
“MFM has an investment team and external investment panel benefitting from deep industry experience in these sectors which since its foundation, has built a portfolio with a potential valuation of in excess of £120m, whilst we continue to benefit from our recent move into e-commerce and gaming sectors, providing highly scalable investment prospects in highly acquisitive sectors.
The objective of Mercia Growth Fund 3 is to maximize capital gain from a portfolio of investments which are anticipated to be trading on a profitable basis within four years of the initial investment. The Fund will provide a blend of early stage, development and growth capital to create an optimal balance between capital growth, portfolio risk and time horizon.”
Based on the Fund Manager’s reported track record to date, the targeted return for Mercia Growth Fund 3 is an annual compound growth of 10-50% (excluding the tax advantages available to EIS and SEIS investors).
Mercia targets the following core technology driven sectors, thus aiming to provide investors with a balanced portfolio across key growth sectors reflective of the investment teams’ sector expertise:
• Medtech and related services
• Telecoms, electronics and software technologies
• Data management and cloud computing solutions
• Digital and e-Commerce
• Gaming, in particular mobile gaming
“A strict and diligent investment process ensures only the strongest opportunities make it into the portfolio whereby each investment prospect is subjected to rigorous due diligence. In addition, an external, independent Investment Panel made up of industry veterans, must approve every new investment by the Fund, thus removing executive investment powers from MFM whilst providing invaluable additional guidance from sector experts.”
The inclusion of an Independent Advisory Board with powers to convene meetings of investors to review the performance of the manager is a unique feature of this SEIS/EIS fund which Mercia tell us is aimed at enhancing investor protection. It underpins the manager’s belief in the value to investors of strong corporate governance oversight in the EIS / SEIS fund sector generally.
For further information on the Fund please contact Talon Golding at Mercia Fund Management directly (firstname.lastname@example.org).