Private equity

Greatness isn’t born, it’s built

Grow stronger

Whether you are looking for investment for your own business, or you are an advisor seeking a new investment partner for your client, then our private equity team can help you think through every element of preparing a business for growth capital.

We’ve always found Mercia people to be down to earth, commercial and, invariably technically as sharp as a pinJeremy Cole, Cole Associates

Jill Williams, Investment Director, Private Equity

It’s comes down to performance. Yours and ours

Whilst Mercia’s track record in the private equity space is relatively new compared to its other asset classes, it has generated impressive returns following the launch of its first fund in 2005.

  • Mercia has a proven strategy with well-managed risks
  • Successful companies and management teams with long-term growth plan
  • Focus on aligned interests and strong working relationships
  • Incremental improvements to increase efficiency and reach critical mass
  • Bringing operational capability to less sophisticated businesses

A strong preference for minority positions

Mercia’s private equity funds can invest from £1.0million up to £10.0million providing capital for early-stage growth, right through to those looking for larger injections of cash as your business matures.

One of the key differentiators in Mercia’s private equity funds is our preference for minority stakes. In our experience, as the owners and managers of successful companies you are far more likely to want to retain ownership, which reflects your entrepreneurial drive, and belief in the longer-term potential of your company and its growth strategy.  We have therefore developed our approach so that the fund will only ever take minority stakes, leaving the majority of the responsibly, and of course the incentive, with the management teams and founders.

New to the world of investment?

If this is your first time seeking external finance, then it’s likely that you will come face to face with a range of confusing acronyms and abbreviations that sometimes stumps even those that work in the world of finance and investment.

We like to think that the Mercia team are a straightforward bunch, but in case we get lost in the moment, here is a short guide that we hope you will find helpful.

Investors’ Insight

Are you ready to turn dedication into growth?

Stage 1

Board room chatter

If you are just beginning to talk amongst yourselves then we would really like to join the conversation. It’s these early discussions which are helpful to understand the journey you are on and what you need the capital for. Private equity may not always be the answer and Mercia has a range of capital available including debt and ‘mezzanine debt’ that may be useful to explore. Not heard of ‘mezzanine debt’ before? Then check out our useful guide below.

Stage 2

Seeking advice

If you are clear that now is a good time for an MBO , then you really need to kick the next stage off by speaking to a corporate finance advisor. These people will have stacks of contacts and can make warm introductions to private equity houses which back businesses like yours. Be prepared to pay for good advice, it will get you into a much better position than those who don’t.

Stage 3

Benchmarking prospects

When you start to meet potential investors you will probably find that the fees and the investment capabilities (how deep their pockets are) are all in the same ballpark.

The things that set investors apart however are values, networks and most importantly track record.

  • Values are important because investment is like a marriage, you need to make sure you share the same values otherwise you will just end up rowing over the washing up.
  • Networks are key too, they can’t be bought, it takes time to build really strong networks and its these networks that make a difference when the investor can introduce you to great people who can do great things for your business.
  • And finally track record, perhaps the most important element of it all. Make sure you find an investment partner that has exited businesses in your sector or your circumstances before. You don’t want to be their guinea pig.

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