Following the closing of Mercia Growth Fund 1, a second incarnation has been established by Mercia Fund Management to tap into investors looking to utilise the tax breaks found in the Seed Enterprise Investment Schemes (SEIS) and Enterprise Investment Schemes (EIS).
To date, Mercia Fund Management has injected £7 million into EIS and SEIS-qualifying businesses, levering an extra £50 million from syndicate backers.
The Mercia Fund 2, which is expected to close by June of 2013, will allow investors a 50 per cent income tax relief and 28 per cent capital gains relief for SEIS investment.
Furthermore, it will provide 30 per cent income tax and capital gains tax deferral for EIS investment and a tax-free capital gain.
Mark Payton, managing director of Mercia Fund Management, comments, ‘This is an extremely exciting time for our team, our investors and investment portfolio – we’re working on finalising our investments from Mercia Growth Fund 1, and the interest in our new hybrid fund is already high, especially as investors seek tax-efficient investments while supporting innovative businesses.’
The first EIS/SEIS fund launched by Mercia Fund Management reached £2 million, and saw its SEIS portion oversubscribed.
More on EIS and SEIS:
- Seed Enterprise Investment Scheme – tax breaks for investors
- George Osborne – Seed EIS to boost start-up investment
- Use of EIS surges as SMEs seek growth capital
When asked by GrowthBusiness when announcements would be made regarding commitments from its first fund, the firm said that news of two investments would be made in the second half of March. The firm will also be announcing its first SEIS investments at the end of March.
For seed companies looking for investment, Mercia Fund Management will be holding an Open House scheduled for 4 April where businesses will be able to find out more.
Mercia Fund Management has also recently announced that Forward Group has become a shareholder. The firm, which has £100 million of assets under management, is said to provide a larger investment pool as well as ‘accelerating’ the growth of what it calls a ‘fully integrated financial services business’.