Mercia Asset Management Expects FY26 EBITDA to Surpass Market Forecasts with £200M+ Fund Inflows

Shareholder returns: buybacks continue into FY27

Mercia completed its £3.0 million share buyback on 31 March 2026 and has already kicked off a new buyback of up to £3.0 million for the year to 31 March 2027. Buybacks reduce the share count, which can support earnings per share and signal confidence in valuation and cash generation. They also return capital without committing to a higher ongoing dividend.

The decision to roll straight into a new programme, coupled with c.£26 million of year-end cash and no debt, underlines a robust balance sheet and management’s willingness to return cash while still investing for growth.

Direct portfolio: progress despite slower exits

Mercia says its direct investment portfolio continues to make “good overall commercial progress” despite the tough environment for venture and private equity investing, M&A, IPOs and exits. Translation: portfolio companies are generally trading on, but exit windows remain narrower than usual. That can delay crystallising gains even if underlying businesses are performing.

For investors, this is a familiar trade-off right now. The management-fee engine is benefiting from new and larger mandates, but the carry and realisation side likely needs more benign markets to fire fully. Today’s update leans positive because the fee-driven side looks strong, and EBITDA guidance is up.

Key numbers at a glance

Assets under management (AuM)	Over £2.0 billion
FY26 EBITDA	Materially ahead of current market expectations
Q4 mandate increases and VCT/EIS raises	In excess of £200 million
FY26 redemptions	None
FY26 share buyback completed	£3.0 million
FY27 share buyback commenced	Up to £3.0 million
Cash at 31 March 2026	c.£26 million
Debt	None
UK offices	11
FY26 full-year results	30 June 2026

Who is Mercia and how it makes money

Mercia provides what it calls “Complete Connected Capital” across four asset classes: venture, development capital, property finance and proprietary capital. Its 11 regional offices and university partnerships help source deal flow outside the usual London hotspots. That regional network is a differentiator and, in my view, helps explain why mandates are being expanded despite market noise.

More AuM typically translates to more recurring management fees. Layer on performance fees and realisations when markets allow, and you have a model that can scale margins. Today’s EBITDA beat points to that fee engine working well.

My take: the good, the less good, and the watch-list

What looks positive

• EBITDA materially ahead of expectations – a clear positive surprise.
• Over £200 million of Q4 inflows via mandate increases and VCT/EIS raises – strong vote of confidence.
• No redemptions in FY26 – revenue visibility and investor stickiness.
• Debt free with c.£26 million cash – balance sheet strength.
• Ongoing buybacks (£3.0 million completed, up to £3.0 million started) – supportive for shareholder returns.

What’s less rosy

• Markets remain tough for exits (M&A, IPOs) – potential drag on realisations and carry until conditions improve.
• “Proposed” increases to mandates – positive, but final documentation and deployment timelines are not disclosed.

What I’m watching next

• 30 June 2026 results – detail on fee-earning AuM, revenue mix, and the quantum of the EBITDA beat.
• Progress converting proposed mandate increases into fully executed commitments.
• Any colour on valuation movements in the direct portfolio given the market backdrop.

Why this update could matter for the share price

Beating EBITDA expectations is usually taken well by the market, especially when paired with evidence of durable, fee-based growth. The combination of fresh inflows, no redemptions, and continuing buybacks provides a supportive set-up. The clean balance sheet adds resilience.

The swing factor remains exits. If markets thaw and realisations pick up, you could see a second leg to the story. If not, the fee engine still looks like it is doing more of the heavy lifting, which today’s guidance upgrade validates.

Dates and details to note

• FY26 full-year results: Tuesday 30 June 2026.
• Analyst webcast: 9.30am on results day (contact [email protected] to register).
• Investor presentation and Q&A: 3.00pm the same day via the Investor Meet Company platform (registration details to follow).

Bottom line

This is a strong update from Mercia. The fee-earning side of the business is gaining momentum, profitability is ahead of what the market expected, cash is healthy, and buybacks continue. The macro headwinds for exits have not disappeared, but Mercia’s regional model and mandate wins are doing the hard work in the meantime.

I’ll be looking to the June results for the nitty-gritty on the size of the EBITDA beat, fee-earning AuM, and any valuation movements in the direct portfolio. For now, it reads like controlled execution in choppy waters.