Three venture capital trusts based in Newcastle have been snapped up by Mercia Asset Management
The fund management firm has acquired Northern Venture Trust PLC, Northern 2 VCT PLC, and Northern 3 VCT PLC, from NVM Private Equity LLP.
Buying the three Newcastle-based trusts will see Mercia increase its assets under management by around 50% to £800m.
The deal takes Mercia a step closer to achieving its three year business plan, which aims to see the firm manage £1bn worth of funds, move to a profitable trading position, and evergreen its balance sheet.
Mercia’s CEO Dr Mark Payton said: “We identified the Northern VCTs and NVM as the perfect fit for Mercia. This is an exceptional opportunity for Mercia, the transferring employees, the VCTs and the Ƶ regions. This moves Mercia significantly closer to achieving our strategic milestone of managing £1bn in assets under management by 2022 and makes us a profitable and valuable active asset manager.
“As a domestic Ƶ-only investor providing substantial support alongside capital deployment, we’ve long recognised this need for ambitious SMEs in the Ƶ regions outside of London. This acquisition demonstrates our long-term commitment to the regions, as well as being a testament to the success of our propriety complete connected capital model that makes Mercia the first choice for investors, investees and employees.”
The acquisition was funded by a £30m placing Mercia announced to the London Stock Exchange this morning (Tuesday).
All nine members of NVM’s venture investment team are expected to join Mercia after the deal. The team will continue to be led by Charles Winward and Tim Levett.
Tim Levett, NVM’s chair, said: “Since founding NVM with Alastair Conn and Michael Denny in Newcastle upon Tyne over 30 years ago, NVM has always focused on regional investment and has grown from managing less than £20m to over £400m now. Mercia’s history is very similar and we believe we are a great fit and are sure that the NVM venture team will thrive and benefit hugely from the deal flow and infrastructure in Mercia.
“Charlie and I are passionate about building value for our shareholders and look forward to working with Mark Payton and the team at Mercia to ensure we combine the best of both groups.”
This is the second deal to be carried out in the North of England by Mercia, after the company bought Enterprise Ventures Group in 2016.
Mercia added that it believed the deal would allow it to “further dominate the regional venture capital market”.
