Mercia Asset Management delivered a FY26 trading update ahead of expectations, with EBITDA now expected to be materially above forecasts despite a challenging markets backdrop. Strong fundraising in H2 looks to have played a key role, with Q4 alone seeing £200m of new funds sourced (from successful VCT and EIS raises) or proposed increases to existing mandates (both quantum and duration). Impressively, there were no redemptions in FY26. The strong end to FY26 and the announced increase in existing mandates bodes well for FY27, as Mercia will be earning a full year’s fees (or nearly a full year) on that newly invested AUM. We await FY26 results on 30 June before updating our valuation, but nothing in today’s announcement suggests it is likely to fall, and we therefore maintain our fair value of 58p/ share.