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Mercia eyes second growth vehicle following clamour for Fund I commitments

19 Nov 2012

UK venture capital firm Mercia Fund Management has closed the seed portion of its latest hybrid fund on £1m in just three months thanks to heavy interest.

The firm said demand had been so significant for the seed element that it was already planning to launch a new hybrid fund, Mercia Growth Fund II, in the new year.

Mercia Growth Fund I’s Seed EIS part gives investors the chance to receive 50 per cent income tax relief when investing in young businesses, while its corresponding EIS portion gives 30 per cent relief for investments in later stage, cash-generating opportunities.

MFM said its hybrid fund style aimed to give investors access to venture capital returns while keeping a balanced portfolio, and reduced risk for SEIS investing through co-investments with Mercia’s other institutional funds.

Mark Payton, managing director at MFM, said, “Thanks to our strong track record of identifying investable companies and established links with universities, which are a valuable source for SEIS-qualifying companies, our Mercia Growth Fund has exceeded all expectations.

“Achieving the £1m SEIS target so soon is a testament to a growing interest in SEIS Funds following approval by the government in July.

“Our hands-on support and SEIS investments will help build the revenue base of businesses and university spinouts to the advantage of investors and the broader UK economy alike.

“Following our impressive success with Mercia Growth Fund I, we are thus preparing to launch the Mercia Growth Fund II in the New Year to satisfy both growing investee demand and investor appetite for such a balanced product.”

MFM also has more than £14m under management across two traditional venture capital funds.

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