Mercia Asset Management PLC on Wednesday said it had achieved a record level of organic fund inflows in its latest financial year in the face of a ‘challenging market backdrop’.

In the year ended March 31, the West Midlands-based asset manager said that organic fund inflows exceeded £0.5 billion, an all-time high for the firm and a 40% increase on its third-party funds under management in financial 2023.

As a result of the ‘substantial inflows’, Mercia said it entered the new financial year in a ‘strong position’.

Mercia finished the year debt free and with an estimate cash balance of around £47 million.

Frontier Development Capital Ltd, acquired by Mercia in late 2022, performed ‘in line with the group’s expectations’ over the period.

Frontier achieved its net new institutional third-party fundraising target of £100 million eight months ahead of schedule.

‘Set against a continuing challenging market backdrop of constrained new fund raisings, private capital co-investment and exits/IPOs, Mercia’s direct investment portfolio continues to make overall technical and commercial progress,’ the firm added.

Chief Executive Officer Mark Payton said: ‘Mercia’s record year of organic fund inflows for FY24, which exceeded £0.5billion, is testament to our investment performance, together with the operational teamwork of everyone in our group. It also reflects Mercia’s ability to effectively deploy equity and debt funding across the UK, through our established regional footprint. We continue to be pleased with the performance of Frontier Development Capital and we remain encouraged by the overall development of our direct investment portfolio.

Mercia will announce its full-year results on July 2.

Shares in Mercia were up 3.5% at 35.20 pence each in London on Wednesday morning.

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