MERC

Mercia Asset Management PLC

Financial Services First-pass screen £125m

560/1000 Overall fit

AI beneficiary 35% 42

Operating leverage 25% 72

Valuation 25% 50

Downside protection 15% 70

First-pass take

MERC is a resilient regional fund manager with strong operating leverage (EBITDA +14% on flat revenue, margin to 24.6%) and 80% recurring revenue. AI exposure is indirect—they manage portfolios of AI-enabled companies rather than being an AI business themselves. Net cash, diversified investors (retail/public sector/institutional), and defensive SME lending provide downside protection. Valuation opaque without disclosed share price.

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