b'16 Mercia Asset Management PLC Annual Report & Accounts 2022Chief Investment Officers review continuedAs at 31 March 2022, the value of the Groups direct investment portfolio was 119.6million (2021: 96.2million). This reflects an upward fair value movement of 11.4million (2021: 10.1million) and net cash invested of 18.4million (2021: 15.4million), less the realisation of Faradion, which accounted for 5.7million of the total opening portfolio fair value.Faradion was sold in January 2022 to Indias Reliance New Energy Solar Ltd,a wholly owned subsidiary ofIndia-based Reliance Industries Ltd, for 100.0million. Total cash proceeds back to Mercias balance sheet of 19.4million Ashwin Kumaraswamy resulted in a realised gain of 9.9million, Investment Director generating a 4.4x return on Mercias direct investment cost of 4.4million and a c.72% internal rate of return (IRR) since the first direct investment in 2017.Direct Investment activitypositive progress across severalThe sale has also generated combined key direct assets and a growingcash returns of c.32million on a total pipeline of potential new directinvestment cost of 3.6million for assets emerging from ourMercias managed funds, delivering fund managed funds.IRRs of between c.30% and c.72%. Mercia has proactively supported Faradion Our proprietary capital has three discretethroughout its development, including functions; selective direct investmentrepresentation from Mercias Investment mainly into existing managed fundDirector, Ashwin Kumaraswamy, as a portfolio companies, as a minoritynon-executive director on Faradions limited partner in seeding strategicallyboard from inception through to exit.relevant managed LP funds, and to fund acquisitions which will accelerate theWe continued to support our foremost Groups growth objectives and enhancedirect portfolio businesses with shareholder value. 11.1million of the 18.4milliontotal being invested across our topOne year into the Groups three-year10 direct investments. Mercia 20:20 strategic plan, the direct investment portfolio is developingWe made two new direct investments increasingly well and we are optimisticduring the year. In October 2021, of more to come. We typically look towe completed a 1.8million direct build direct holding stakes of betweeninvestment into Forensic Analytics Ltd, 10% and 30%, and this, combined withalongside a 2.7million investment our managed fund positions, givesby our Northern VCTs. In November Mercia a degree of influence over the2021, Mercias third-party managed development of these young companies. fund portfolio company, Pimberly Ltd, completed a 4.3million funding round to expand into the US market and accelerate its growth in the UK.'