b'Annual Report & Accounts 2022 Mercia Asset Management PLC 19Strategic reportCase study: Nova PangaeaSourcing deals from all regions One process to produce of the UKAt Mercia we have 74 investmenttwo products: one is professionals spread across the regions, and have further scaled our reachcarbon neutral and one by opening a new office in Bristol tocarbon negative.strengthen our presence and growth in the South West of England along the M4 corridor and into Wales. FundSustainable bio-based products converted from agricultural wastematterPrincipal Julian Dennard is building hisNova Pangaeas REFNOVA technology converts non-food derived biomass into team and has already sourced dealstwo high-value sustainable products: NOVASUGAR and NOVACHAR.in Cardiff, Exeter and Bristol. We have also expanded our teams in ManchesterNOVASUGAR is a fermented alternative to bioethanol that makes advanced and London, and continue to providebiofuels such as Sustainable Aviation Fuel (SAF). NOVACHAR is a sustainable nationwide coverage, completing newalternative to steel fuel coke that can be used to make green steel and is a investments from North Shields tocarbon-negative soil enhancer.Shoreditch, from a wide variety REFNOVA reduces the dependency on fossil-based products. In doing so, of sources. Nova Pangaeas technologies support the quest for global net-zero and Our managed funds as at 31 March decarbonisation.2022 totalled c.758million. Duringthe year, we invested 105.7million c.7.3minto 148 businesses, including 95new companies. Venture Total investmentOur Northern VCTs transacted nine investment disposals across both older legacy assets and newer early-stageDevelopment plans ran for 360 hours to prove continuous capability portfolio companies. Exits across theProject with British Airways and LanzaJet to develop SAF funded by the year included the VCTs holdings inDepartment for TransportationIntelling Group Ltd, Project Glow TopcoMercia introduced the CEO and the team grew by 280% since the first investment Ltd t/a Currentbody.com and MojoFour proprietary patents expansion into US and Canada Mortgages Ltd, plus partial disposals of Oddbox Ltd and musicMagpie plc. The overall performance was impacted bya reduction in the valuation of listedAIM investments in the quarter to31 March 2022. Theres a huge potential market for Nova Pangaeas products given the current appetite for Clean Tech solutions in the transportation andindustrial sectors.We have supported Nova Pangaea across multiple funding rounds since 2019. In that time, Nova Pangaea has constructed their development plant and demonstrated their unique REFNOVA process from their facility atWilton International.Nova Pangaeas process creates a second-generation carbon-neutral bioethanol as well as a carbon negative biochar. The unique dual output process utilises purely waste products and places Nova Pangaea at the forefront of the global shift towards decarbonisation and sustainability. Joe StauntonInvestment Associate,NPIF'