b'Strategic report Governance Financial statementsThis strategy will translate into value for our shareholders and the investors in our funds.To achieve this, in 2019 we set out five three-year strategic priorities: 01 02 03Strategy Strategy StrategyIncrease AuM to Achieve 15% IRR Achieve operating at least 1.0bn on third-party profitabilityand balance sheetOrganic growth in our SEIS/EIS funds Recurring revenue from growing FuMNew mandates equity investments Operational leverageSelective acquisitions Disciplined spendProgress Progress ProgressIn 2020 we increased third-party Mercia is well placed with preserved capabilityFollowing the acquisition of the VCT fund funds from c.381m to c.658m and liquidity to manage its immediatemanagement business, we expect to be 54.3m from increased mandatespriorities and sustain its strategic objective ofprofitable on an operating basis in the new c.250m through the strategic acquisitionachieving 15% IRR in portfolio performance. financial year.of the VCT fund management businessThere continues to be operational leverage in Mercia to support further growth.04 05Strategy StrategyBecome the most Evergreen our balance active investor in The Mercia model issheet to fund our direct our market with up different. I do think itsinvestment activities to 20% market share been really important forthrough cash our growth and its beenrealisations from our Access to deal flow through networksvery important for me in and university partnerships direct portfolioReputation and track record ofterms of being able to supporting investee companies understand what weProgressComplete Connected Capital offering need to do to position theOur portfolio of direct investments has an Experienced team capable of completingaverage holding period of just under three investments equitably and efficientlybusiness right for other years. On average we target a holding period investors. Its been greatof three to seven years, allowing our Progress working with Merciacompanies to establish their business model In 2020 we increased our and scale up with our support.market share to 18% over the years.Evaluated 59% of deals in the region andOur investee companies are making invested in 18% Ryan Cawood operational progress, some achieving Completed 133 investments across Founder & CEO, OXGENE. significant milestones, although COVID-19 and all portfolios the economic outlook are creating challenges and, in some cases, delays.Our focus has been on evaluating the short and long-term impact on every business, acting decisively and extending the cash runway where appropriate.Mercia Asset Management PLC 15Annual Report and Accounts 2020'