b'30 Mercia asset Management PLc Annual Report and Accounts 2021Chief Investment Officers review continuedPowered by people direct investmentsfour exits We made two new direct investments I dont think any of us will forget the last and value creation throughduring the year: Sense Biodetection and 12 months. As I sit here in my home study, operational progress MIP Diagnostics, both from our Enterprise I cant help but think about the hugeAs at 31 March 2021, the value of theInvestment Scheme (EIS) Funds. changes we have all been part of in ourGroups direct investments was business and our way of life. I look forward96.2million (2020: 87.5million). ThisMIP Diagnostics received initial investment to a return to normality, however, it has toreflects an upward movement in fair valueof 0.3million as part of a 5.1million be said that many of the new ways ofof 10.1million after net investment ofsyndicated commitment resulting in a working, interacting, purchasing and15.4million (2020: 15.7million) and3.3% direct stake in addition to the c.30% consuming, adopted during the pandemic,adjusting for the four realisations: Crowdfully diluted stake held through our have made us more efficient and are hereReactive, The Native Antigen Company,managed funds. MIP Diagnostics is a to stay as the bedrock of continuedClear Review and OXGENE, whichspinout from the University of Leicester, growth. We have witnessed fundamentalaccounted for 15.9million of fair value which has developed a proprietary process changes to the way our healthcare isas at 31 March 2020. to provide molecular imprinted polymers delivered and to the speed of developmentto the Vitro Diagnostic, Bioprocessing and of medical solutions. We have becomeWe recorded unrealised fair value gains inOil and Gas industries. The company acutely aware of the rapid change towardsVoxpopme 1.6million, Impressionrecently announced a partnership with a low-carbon environment, and withinTechnologies 1.9million, FaradionStream Bio to develop a rapid COVID-19 that, our social responsibilities to others. 1.2million, MyHealthChecked 3.5milliondetection assay.and Soccer Manager 0.2million, in line Mercia has emerged from the last 12with our policy, which follows theSense Biodetection is focused on the months in a very strong position. We haveInternational Private Equity and Venturedevelopment of instrument-free point-of-transacted 10 profitable exits across ourCapital Valuations Guidelines (IPEVCVG).care molecular diagnostics. Post funds and proprietary capital, returningThe fair value gains in Voxpopme relate toinvestment, we hold a 1.2% fully diluted c.103million. Three of these companiesthird-party investment and in Impressiondirect investment in addition to a 9.1% were also held as direct investments,Technologies, to the acquisition of afully diluted stake in our managed funds. providing liquidity of 37.0million for theco-investors stake. Faradions upliftIn 2020, Sense Biodetection raised a Group, and in so doing, achieving our keyresults from third-party value indicators,$50.0million Series A round and aim of evergreening the direct portfolio.and MyHealthChecked saw its share priceannounced an accelerated programme to This is down to the excellent entrepreneursincrease as a result of significantlaunch an instrument-free, point-of-care and management teams we back and Icommercial progress. molecular diagnostic test for COVID-19, would like to thank them all for theirpartnering with Phillips-Medisize to scale tremendous efforts this last year.Automotive-related assets that sawup production.reductions in March 2020 due to COVID-19, We have continued to invest to accelerateprimarily Warwick Acoustics anddirect investments: value creation; helping to buildImpression Technologies, are seeingoperational highlightsmanagement teams by addingrenewed interest from original equipmentnDreams, Voxpopme, Intechnica, Soccer experienced chairs, non-executivemanufacturers (OEMs). Eyoto has notManager, VirtTrade, sureCore, Faradion, directors, financial directors and ventureyet seen a meaningful recovery and weMedherant and W2 Global Data Solutions partners, and by developing our networkhave reduced its valuation by 0.4million,all achieved increased revenues during of like-minded co-investors. Our venturereflecting delays in Food and Drugthe year. Other measures of progress partners, funded by Mercia, provideAdministration (FDA) approval for its slitacross the portfolio included new license short-term input for example, to redesignlamp product, with a consequent impactdeals at Impression Technologies, sales processes, fine-tune routes to marketon revenues. Medherant and sureCore, acquisitions at strategies or technology roadmaps.MyHealthChecked and Locate Bio, investment activity syndicated investment by Voxpopme and We developed a digital engagementWe continued to support our largest andtechnical progress at Faradion, Locate Bio platform to enhance our originationmost promising assets with capital andand Medherant. Highlights include:efforts, including webinars and onlineresource. 10.3million of the 15.4millionnDreams saw revenues up c.30% and sessions between founders andinvested was allocated to our top 10continued strong partnerships with investment professionals. These will be aassets. We also made use of the Futurevirtual reality (VR) hardware permanent feature of our business and aFund, with a further 14.8million invested.providers. The VR market saw positive example of the applied learningsOur aim remains to build equity stakes ofprogression with the successful release and structural changes arising from thebetween 20%40% in the majority of ourof the Quest 2 headset from Oculuspandemic. We have also undertakendirect investments.comprehensive training for ourinvestment staff.'