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Investment strategy

Mercia Technologies creates capital growth for shareholders - by operating as a national player in the creation, funding, incubation and development of high-growth technology businesses.

Investment strategy

Mercia Technologies creates capital growth for shareholders - by operating as a national player in the creation, funding, incubation and development of high-growth technology businesses.

Investment strategy

The investment objective of the Group is to generate capital growth for Shareholders by becoming a leading national player in the creation, funding, incubation and development of high-growth technology businesses with an emphasis on the Midlands and the North of the UK.

The Group intends to meet its investment objective by:

  • providing early stage businesses with infrastructure, management support and access to capital from the MFM Funds;
  • making direct investments via Mercia Technologies primarily into businesses within the MFM Portfolio;
  • undertaking strategic corporate transactions either via investing in or acquiring complimentary businesses or sub-critical funds;

The Group will seek exposure to developing companies which combine technology and service provision, have significant intellectual property, are scalable and require relatively modest capital infusion. The Group will primarily seek exposure to developing companies in, but not limited to, the following sectors:

  1. Digital & Digital entertainment;
  2. Software & the Internet;
  3. Electronics, Materials, Manufacturing & Engineering;
  4. Life sciences & Biosciences.

There is no limit on the size of a direct investment by Mercia Investments in a business. Once fully invested, the Board anticipate that Mercia will typically derive its income from a portfolio of not less than eight companies.

MFM manages each MFM Fund in accordance with their respective investment objective and policy (a summary of which is set out at paragraph 7 below) each of which, for the avoidance of doubt, is distinct from the investment objective and investment policy of the Group and the investment objective and investment policy of the other MFM Funds.

In respect of direct investments made by Mercia Technologies, the Directors will apply some or all of the following investing strategy to achieve the investing policy:

  • a pre-identified strong market potential and high opportunity for growth;
  • the identification of likely exit opportunities, such as trade sales, flotation or partnerships;
  • the technology team should be recognised as leaders in their field;
  • there should typically be an underlying enabling and scalable technology, capable of addressing multiple applications;
  • there should be defensible intellectual property and ideally comprehensive patent protection, with the ability to enhance this position as the investee company develops;
  • the technology is typically projected to be no more than two to three years away from demonstrating incremental value to third party investors or trade buyers or being capable of generating revenue streams for the business.