b"wwStrategy in actionStrategicexecutionSince our IPO in December 2014, we have strengthened the Group through targeted strategic acquisitions, increasing our scale,the breadth and depth of our offering and now our profitability.In December 2019 Mercia acquired threebusiness model. Looking forward, theCreating valueventure capital trust (VCT) fundacquisition strengthens our ability to raise and management contracts (the Northern VCTs)win new fund mandates, continuing to grow ourAccelerates progressfrom NVM Private Equity LLP andfund management business and future financialtowards 1.0bn AuM bringingsimultaneously raised 30.0million,returns for the Group. Pleasingly, post periodin c.250m AuMaccelerating its progress towards its goals end in April 2020 the Northern VCTs raised of reaching 1.0billion AuM, operating38.2million in a market environment drasticallyIncreases Mercias recurring profitability and an evergreen balance sheet.affected by COVID-19, demonstrating therevenue base and operating quality, robustness and reputation of the threeprofit contribution Significant valueNorthern VCTs.creation opportunities Complements Mercias Complete The acquisition of the VCT fund managementNVMs portfolio and liquidity cementConnected Capital model business is a critical inflection point for theour positionGroup, significantly increasing our scale,The acquisition of the VCT fund managementMakes Mercia a leading provider adding a new investment product to ourbusiness complements Mercias Completeof regional seed and growth offering, additional capability to ourConnected Capital model and cements ourcapitalinvestment team and a portfolio of maturingposition as one of the foremost regional VCT investee companies.providers of capital to growing SMEs. Together,Expands the Groups liquidity to the Northern VCTs portfolio consists of c.60deploy into regional SMEs Scaling accelerates pathcompanies, including 17 listed companies, 27 to profitability private venture companies and 16 private equityBroadens Mercias origination With the acquisition of the VCT fundcompanies. This extensive portfolio creates newnetwork management business, Mercias total AuMopportunities for our direct investment grew by c.250million (an increase of c.50% portfolio. Expands the direct investment at the time of the acquisition) bringing inopportunities through the VCTs' additional recurring revenues that will makeLiquidity is a key success factor in our business.underlying portfoliosus profitable at an operating level (before fairThis makes us a preferred choice for quality, value adjustments, realisation gains and allpotential investee companies and gives us non-cash charges). This is a considerable stepflexibility to support and manage our portfolios towards developing a fully sustainableas companies mature. Following the acquisition, Mercia has 30.2million of unrestricted cash to invest from its own balance sheet.VCTs FuM at date of acquisitionc.270m Finally, the 30.0million placing associated with the acquisition strengthened the Companys financial position and its shareholder register, bringing in new investors, which will enhance Funds raised in 2020 liquidity for our shareholders.38.2m20 Mercia Asset Management PLCAnnual Report and Accounts 2020"