The Mercia Northern VCT
Fund Overview
Mercia Northern VCT focuses on investing in innovative UK businesses across multiple sectors, including technology, life sciences, and digital services. The fund combines private and AIM-listed investments, targeting companies with strong growth potential and scalable business models. As of September 2023, the fund manages net assets of £120 million and has a track record of delivering consistent returns through a blend of capital growth and regular tax-free dividends.
Investment Strategy
The Mercia Northern VCT adopts a multi-sector investment strategy, focusing on innovative, high-growth businesses. Managed by Mercia Asset Management, the fund provides hands-on support to its portfolio companies, leveraging Mercia’s extensive network and sector expertise.
Key Elements of the Strategy:
Sector Focus:
- Technology: Companies developing software, AI, and digital platforms.
- Life Sciences: Firms advancing healthcare technologies and diagnostics.
- Sustainability: Businesses addressing environmental challenges through clean technologies.
- Generalist Investments: Diversification into consumer, manufacturing, and financial services.
Investment Criteria:
- Scalable, revenue-generating businesses with potential for market leadership.
- Strong management teams and robust intellectual property.
- Opportunities for significant value creation through trade sales or IPOs.
Portfolio Diversification:
- Aims to maintain a balanced portfolio of private and AIM-listed companies.
- Focuses on 60-80 investments across a range of stages and sectors.
Geographic Focus:
- Primarily UK-based companies, with particular emphasis on regional innovation outside London.
Recent Investments and Focus Areas:
- Technology Expansion: Backing AI-driven software companies catering to global markets.
- Life Sciences Innovation: Supporting firms specializing in medical diagnostics and therapies.
- Sustainability Projects: Investments in renewable energy and environmental solutions.
How This Benefits Investors:
The Mercia Northern VCT combines high-growth opportunities with regular income potential, offering a tax-efficient way to invest in some of the UK’s most exciting businesses.
Performance Metrics
| Year | NAV Total Return (%) | Dividends Paid (p/share) |
|---|---|---|
| 2024 | 6.2 | 5.0 |
| 2023 | 5.8 | 4.8 |
| 2022 | 4.5 | 4.2 |
Note: NAV Total Return is the sum of NAV growth and dividends paid.
Tax Benefits
Investors benefit from:
- 30% income tax relief: Available on investments up to £200,000 annually.
- Tax-free dividends: Regular income payments without tax obligations.
- Capital gains tax exemption: No CGT on share disposals.
Contact Information
- Phone: 0330 223 1430
- Email: [email protected]
- Website: Mercia Northern VCT
Why Consider Access EIS Instead?
Both Mercia Northern VCT and Access EIS offer tax-efficient ways to invest in innovative UK businesses, but they cater to different investment needs:
| Feature | Mercia Northern VCT | Access EIS |
|---|---|---|
| Investment Focus | Innovative UK businesses, including private and AIM-listed companies | Early-stage, high-growth UK startups |
| Minimum Investment | £3,000 | £5,000 |
| Tax Benefits |
- 30% Income Tax Relief - Tax-Free Dividends - Capital Gains Tax Exemption |
- 30% Income Tax Relief - Capital Gains Tax Deferral |
| Liquidity | Some liquidity via AIM and buyback schemes | Illiquid, with returns realized after ~5–7 years |
| Dividends | Regular, tax-free dividends | No dividends; all profits reinvested |
| Risk Level | High (private and AIM-listed companies) | Very High (early-stage startups) |