b'Mercia asset Management PLc43Annual Report and Accounts 2021DebtFundsPaul tabernerManaging director,Mercia debt Fundsat the start of Mercias last financialWith over c.100million of debt funds underStrategic reportyear, regional sMes feared for theirmanagement (FuM), the role that these very survival. We were inundatedfunds can play in backing SMEs has a much with requests for capital repaymentwider impact than simply providing finance holidays (crH) as businessesin the form of a standalone loan. Over the sought to preserve cash as they staredlast six months, the debt funds haveGovernance Financial statementsdown the barrel of lockdown.supported our venture teams by providing debt finance to the wider venture portfolio. Many of our portfolio businesses were ableThis close partnership is something we see to access the Coronavirus Businessoften across the Group, with many examples Interruption Loan Scheme (CBILS) thatof collaboration to support the portfolio.Mercias Northern Powerhouse InvestmentThis cooperative model, known as our Fund (NPIF) was accredited in July 2020Complete Connected Capital, also to deliver, on behalf of the British Businessstrengthens our position in the market by Bank (BBB). The Group also launched aoffering a wider range of funding and new Mercia SME Loan fund, in partnershipinvestment options than typically provided. with Greater Manchester Pension Fund.Using complementary pools of capital This fund not only demonstrates ourmeans that we get to see more deals than commitment to provide sustained supportwould otherwise be the case. Crucially, to UK SMEs, allowing them to focus ondebt finance can play a critical role in business recovery, but this new capitalsupporting recovery and a strong rebound could also play an important role infor SMEs and by offering the right capital, at supporting a sustainable economic growththe right time, to companies we invest in, trajectory by funding investment intowe underpin Mercias role as a true partner innovation and productivity activitiesrather than just an investor, to support the across the regions.regional UK economy as it emerges from Notwithstanding the huge uplift in loanthe pandemic. applications, levels that in the second half increased almost four-fold compared to the previous year, the debt team also supported the wider investment team in equity investment opportunities.'