EIS Magazine - November 2016

EIS

SEIS

VCT

SITR

IHT

BPR

IntroducIng PrIme InherItance tax ServIce

Direct Lending to Small Businesses can generate long term, stable returns whilst mitigating inheritance tax.

helping small businesses reduce their costs and increase their efficiency through the financing of modern equipment, machinery and vehicles as well as providing capital for renewable energy and waste to energy related projects.

CONTENTS 4. Editor’s Welcome 6. News EIS Magazine is published by

IFA Magazine Publications Limited, The Tobacco Factory, Loft 3, Bristol BS3 1TF Full subscription details and eligibility criteria are available at www.eismagazine.com ©2016. All rights reserved.

Telephone: +44 (0)117 9532 003 Editor-in-Chief: Michael Wilson editor@ifamagazine.com

City Editor: Neil Martin neil.martin@ifamagazine.com

Publishing director: Alex Sullivan alex.sullivan@ifamagazine.com

12. AIM stocks to help make inheritance tax savings

Douglas Lawson, Director at Amati Global Investors, looks at the current prospects for AIM stocks

14. Market volatility fails to dampen

appetite for alternative investments

Design: Fanatic Design EIS Magazine is for professional advisers only.

Full subscription details and eligibility criteria are available at www.eismagazine.com

To learn more visit our website, follow us online or contact us:

British investments

Commissioning Editor: Michelle McGagh

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IHT PORTFOLIO

11. Breaking down barriers with Great

EIS Magazine is a trademark of IFA Magazine Publications Limited. No part of this publication may be reproduced or stored in any printed or electronic retrieval system wihtout prior permission. All material has been carefully checked for accuracy, but no responsibility can be accepted for inaccuracies, independent research and where necesary legal advice should be sought before acting on any information contained in this publication.

16. Time to celebrate: AIM has come of age

18. Beyond IHT - the wider benefits of business relief

22. AIM: a stockpicker’s market for IHT planning

Love it or loathe it, the AIM market cannot be ignored, according to Chris Hutchinson, Director of Unicorn Asset Management

T: 0203 178 4055 E: info@prime-iht.co.uk W: www.prime-iht.co.uk

26. How to find the newest EIS opportunities

NOTE: This document is issued by Prestige Asset Distribution Limited, as financial promotion for information purposes only. It should be ignored by any UK recipients who are not either (i) authorised under the Financial Services & Markets Act 2000 (“FSMA”) or (ii) are investment professionals (within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (‘‘FPO’’), certified sophisticated investors (within article 50(1) of the FPO), persons of a kind described in article 49(2) of the FPO or certified high net worth individuals (within article 48(2) of the FPO). If you are in any doubt you should consult an independent financial advisor, who should be authorised under the Financial Services & Markets Act 2000 if you are in the UK. This financial promotion has been approved for the purposes of s21 FSMA by Prestige Asset Management Limited which is authorised and regulated in the UK by the Financial Conduct Authority (FCA). Your capital may be at risk and you may not get back the full amount invested. Tax treatment depends on the individual circumstances of each investor and may be subject to change. Past performance is not a reliable indicator of future results and any forecast is not a reliable indicator of future performance. The availability of tax reliefs also depends on the investee companies maintaining their qualifying status. The Prime IHT Portfolio invests into small unquoted companies which are not quoted on any stock exchange and which are likely to have higher volatility and liquidity risk than shares quoted on the London Stock Exchange Official List. First Equity Limited, Prestige Asset Distribution Limited, Prestige Asset Management Limited and Jarvis Investment Management Limited do not provide financial or tax advice on the Prime IHT Service and as this product is not suitable for everyone, investors should seek independent investment and tax advice from suitably qualified advisor(s) before making an application to invest in this product. Please note that all the information and figures in this document are correct as at 09/2015, unless otherwise noted. © 2016

To stay up to date with the latest EIS news visit www.eismagazine.com

28. Open Offers

Our monthly listing of what’s currently available for subscription.

November 2016 · www.eismagazine.com

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STEADY AS SHE GOES You can hardly blame Theresa May for having more things on her mind than investment matters at the moment. As Britain prepares to set sail for a lonely farewell voyage around its European partners, for which most of us in the finance sector begrudge the price of the tickets, the state of the nation’s smallcap and fledgling companies is probably some way down her list of priorities.

Oh, certainly, the Prime Minister has made some resounding speeches in favour of the small company sector since the Brexit vote. Innovation, courage, collaboration and competitive advantage are as important today as they were in Drake’s era, or Nelson’s for that matter. And ‘alternative sources’ of risk funding which bypass the traditional stocks-and-bonds routes are rightly held up to the public as examples of everything that makes Britain special. None of the European Union countries has anything like the small-company focus that we do – which is odd, actually, since they provide so many of the jobs in France or Germany. And the EIS Association, as you’ll see on Page 8, has not been slow to welcome Mrs May’s statements on alternative funding. All we need to see now is some proper sign that she means what she says.

For some months now, the clouds have been drifting north from Westminster. News of tax purges, punitive reprisals against advisers whose recommendations overstep what HMRC considers to be the mark, and the distinct prospect of major changes in the Autumn Budget have been making the news. (23rd November’s the date for your diaries, by the way.) And up to a point, you can see why. With Chancellor Philip Hammond’s Budget Balance Day now disappearing beyond 2020 and out of sight into the future, some degree of fiscal tightening is to be expected.

Broadening the Campaign Which is an even better reason than ever for the government to redouble its efforts on behalf of the SME sector. Smallcap indices have been beating the FTSE-100 and the All-Share hollow in the last two years, and the development of SEIS, crowd-funding, AIM share investing (in all its forms) and Venture Capital Trust investment bears witness to the enthusiasm and the drive that the country is likely to need, more than ever, if and when we cut our ties with the European Single Market.

There’s also the point that several of the restrictions imposed by the previous chancellor George Osborne on the alternative investment market – notably on renewable energy, and on the eligibility structures of VCTs – came from Brussels rather than from Number 11 itself. Say it

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EIS Magazine · November 2016

gently, but this may prove to be a turning point in more ways than one.

One way in which things have already turned is that the old emphasis on tax efficiency is no longer the main driving force behind alternative investments. The team behind EIS and IFAM Magazine have helped refocus the narrative with key stakeholders over the last six months and as the EISA letter in these pages shows, the main force of the argument for alternative investments is now on the hugely beneficial role that they can play in developing new ideas and – just as importantly – turning those ideas into viable businesses that can carry the nation forward. England expects. And so do Scotland, Wales and Northern Ireland…

That’s why you’ll notice a change of emphasis in this month’s magazine and from next month we are broadening out our subject coverage to take in a wider range of investments that tackle the burning need for fledgling risk capital – VCTs, BPR strategies, and, in this issue, the “official” Alternative Investment Market, or AIM. Not every adviser will be aware of the many ways in which AIM stocks can contribute to a tax-efficient strategy for more risk-tolerant investors. AIM plays an important part in the construction of VCTs, Business Property Relief and Inheritance Tax strategies. And, as you’ll see from the Octopus chart on Page 17, AIM portfolios have displayed a remarkable lack of volatility over the last 20 years that will surprise some readers.

But, for now, our aim is to redirect your gaze toward the opportunities that still abound for backing one of the most vibrant enterprise cultures in the world. Ours! It would be a foolish Chancellor who allowed short—term fiscal priorities to deflect his aim on Autumn Budget Statement Day, to the detriment of Britain’s enterprise economy.

And we have full confidence that he will do no such thing.

Mike Wilson Editor in Chief

Make It Your Business

Toil. Hard graft. Late nights.

The sign of a business that means business. We’ve been doing just that as we announce our transition from Seed EIS Platform to GrowthInvest.

We are making it easier for Advisers to become more active in the tax efficient investments arena.

We have upgraded our unique investment platform and added tools which allow you to provide better service to your clients. We will give you the confidence and a compliant, intuitive framework to extend your business practices.

Our platform is set to be a game-changer in the Alternative Finance sector, which is itself about to enjoy a bright new dawn.

Make it your business, before others make it theirs.

Find out more at growthinvest.com

News Round up of the latest industry news Advisers warned to start their EIS season early

Seedrs claims top crowdfunding spot Seedrs is once again the UK’s most active investor in private companies, having funded 78 equity deals in the first half of 2016.

A just-published report from a third-party research agency shows that Seedrs made more investments in 2016, so far, than any other equity crowdfunding platform. This gives it a share of the UK equity crowdfunding market which exceeds 50%.

Advisers are being warned to start their EIS season, or risk losing out, according to a senior industry figure.

The warning comes from Chief Executive of Kuber Ventures Dermot Campbell (pictured) who says that advisers should start in October, rather than waiting for the period from January through to the end of tax year which has been the historic pattern.

Campbell said the recent change in legislation, removing the ability to invest in solar energy production within an EIS investment, has reduced the market capacity by £350 million pounds for the year 2016/17. Add in a maturing book of some £200 million, said Campbell, and there is likely to be a considerable impact upon capacity. He points out that last year, it was evident that many advisers brought their EIS “season” forward. This resulted in many sending out recommendations in October and by the end of the tax year, there was very little capacity left.

Campbell said: “Advisers who delay in running due diligence on EIS investment houses and establishing access to capacity in the appropriate assets run the risk of not being able to secure the right assets.

This could mean that, towards the latter end of the ‘season’ investments are made purely on the basis of availability rather than research.”

Furthermore, the changes in legislation have also increased the underlying risk profile of EIS investing by removing the historically lower risk asset classes such as renewable energy. The changes are recognised as a drive by HMRC to make sure that EIS investments are made not just in the letter of the legislation, but also within the spirit.

Advisers can still manage the risks of EIS investing by building diversified portfolios which is now significantly more important as a risk management tool, said Campbell.

Campbell added: “Advisers have long diversified equity investments using platforms, enabling the use of multiple investment managers and different asset classes to reduce risk. With the changes in legislation it is now important that advisers apply the same principles to EIS and SEIS investing.”

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EIS Magazine · November 2016

The 78 deals this year compares with, for the same period, 55 in 2015, and 43 in 2014. Since its launch in 2012, Seedrs has funded more than 380 deals.

Recent investments include: challenger bank Tandem, which raised £2.2 million from 1712 investors; West Berkshire Brewery which raised £1.7 million from 647 investors; P2P lender Landbay which recently announced a partnership with Zoopla and reached £1.6 million with 407 investors; beauty-on-demand app blow LTD which raised £1.3 million; and, annual travel ticket subscription service CommuterClub, which overfunded to £1.2 million.

CEO & Co-Founder at Seedrs Jeff Lynn said: “We are delighted to continue our lead as the most active equity investment platform in the UK and to have funded 78 deals in the first six months of 2016. The gap between Seedrs and the closest competitor is also increasing as Seedrs continues to take 50% market share of all UK equity crowdfunding activity.

It is a great start to what looks set to be a recordbreaking year.

“We haven’t seen a notable slowdown since the referendum in spite of fear mongering around the country. The UK is still attractive and safe for inward investment and will continue to be one of the number one destinations for entrepreneurs to set up a business with its favourable tax reliefs, streamlined business incorporation and simple transport abroad.”

EISA pens open letter to Theresa May

EISA has sent an open letter to Prime Minister Theresa May highlighting the importance of EIS to the economy and calling for a number of reforms to the EIS regime.

EIS Magazine prints the letter in full below: “Dear Prime Minister, The Enterprise Investment Scheme Association (EISA) is deeply encouraged by your establishment of a new Cabinet committee tasked with creating policies and initiatives that deliver a fairer economy that works for everyone.

In particular, we believe you are right to highlight the importance of small and medium-sized businesses (SMEs) as the “backbone of the economy”, and to seek their views on how to get the economy “firing” post-Brexit.

One way of helping to do this is to improve access to equity risk funding. Start-ups and established small and medium-sized businesses can struggle to access the funding needed to grow and to take the next step in their development, with many banks unwilling to lend, or too inflexible in their terms, to be a viable choice for some SMEs. The Enterprise Investment Scheme (EIS), introduced by the Major Conservative government, and its sister funding vehicle, the Seed Enterprise Investment Scheme (SEIS) provide the necessary incentives for high risk equity investment in SMEs. EIS has delivered more than £14bn of equity funding for 25,000 SMEs since it was created in 1994. Fundraising levels have trebled since 2011. In 2014-15, the most recent year for which data has been published, more than £1.6bn was raised by SMEs through EIS – higher than in any previous year.

Against this backdrop, the climate for small-tomedium-sized enterprises in the UK remains hugely positive. We are confident that in the post-Brexit world SMEs will play an ever stronger role as the UK’s engine for growth, employment and innovation.

The vibrancy and dynamism of SMEs is one of the UK’s strongest economic assets and the importance of EIS and SEIS in incentivising the provision of equity investment for SMEs is likely to be even more important as we go forward. EIS is about empowering entrepreneurial companies by providing the investment for them to prosper and grow.

But the schemes are not perfect. Improvements could be made that would improve SMEs’ access to funding via these schemes and perhaps increase total investment levels – benefiting businesses, EIS and SEIS investors and the entire UK economy. Last year a series of new regulations were imposed, under EU direction, which placed greater and more complex restrictions on businesses’ eligibility for EIS and SEIS funding and on the amounts they are able to raise under the schemes.

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EIS Magazine · November 2016

EISA to help judge Stelios Award for disabled entrepreneurs in the UK Much of the complexity imposed on these schemes by Brussels needs to be removed to enable these growing companies to make their full contribution to a vibrant UK economy. Lifting most or all of these restrictions would be a quick, simple and decisive step in the right direction to getting the UK economy performing, postBrexit. Such a move would be welcomed by SMEs across the UK and would also serve as a positive demonstration that Brexit can bring benefits, by unshackling business from EU-imposed regulation that hinders their growth. It is worth stating some of the key conclusions from HMRC’s own independently commissioned research (The use and impact of venture capital schemes – February 2016 – HMRC Research Report 355) which investigated the schemes as constituted prior to April 2015.

For the second year running, the EIS Association (EISA) is supporting the Stelios Award for Disabled Entrepreneurs in the UK.

The research provided evidence that suggests the schemes were working as parliament intended.

“Nevertheless, it was an extremely humbling experience to judge the Stelios Awards for Disabled Entrepreneurs last year. I realised how difficult it could be for some of the 2015 entrants to go about their normal lives, doing things that able-bodied people take for granted. So establishing a successful business, on top of the additional challenges that can come with having a disability, is an achievement truly worth recognising and rewarding.

A majority of the companies considered the schemes to be essential in securing investment.

Just 11% felt that their proposed investment would have gone ahead without the schemes.

Nine in ten (90%) of investee companies said their company had grown in terms of employee numbers since they first sought EIS or VCT investment. Nine in ten (90%) companies attributed at least part of their growth in employee numbers to EIS or VCT investment.

The median growth in employment since seeking venture capital was 33%,

EISA members will be asked to contact disabled entrepreneurs they know who might want to apply for the award.

The award, which comes with a first prize of £30,000 and four runner-up prizes of £10,000, is run in association with the charity Leonard Cheshire Disability.

Former EISA Director General and now special adviser Sarah Wadham, who will once again be on the judging panel, said: “Starting and running a successful business is a challenge for anyone, and EISA encourages entrepreneurship regardless of who the individuals involved are.

• a company owned by a person with a disability;

Greater awareness among politicians and in government. Research by the Entrepreneurs Network has found less than a quarter of MPs have heard of EIS. If more MPs and policymakers are aware of the schemes, they would be able to champion them to businesses in their constituencies. We would like to work with government on this issue.

• a company that supplies products or services to disabled people.

We would be delighted to discuss further the crucial role EIS and SEIS play in SME equity funding and work with government on how this can be maintained and improved as we seek to build a stronger economy outside the EU. Yours sincerely, Mark Brownridge, Director General Lord Flight, Chairman Enterprise Investment Scheme Association

Sir Stelios said: “I am delighted this idea I had 10 years ago has matured to be an institution still supported by the leading charity in the UK in the field of disability. To celebrate our 10th anniversary I have decided to increase the cash prizes to £70,000 and make it more inclusive so even people with a worthy business plan can apply before they have a real business. Spread the word so we can get more applicants than ever before.”

Start-ups and pre-revenue businesses are eligible. The main eligibility is:

• a company which predominantly employs disabled people;

The EISA, which represents the EIS and SEIS industries, can offer a unique insight into some of the challenges that SMES seeking funding, and those that arrange and provide it, are facing.

EISA Director General, Mark Brownridge, said: “EISA is delighted to support the Stelios Awards for Disabled Entrepreneurs in the UK. I’d like to encourage all of our members to consider whether they know an individual or company or would be eligible to enter and to tell them about the awards.”

“It’s a real honour to be asked to be a judge again this year and something which I’m very much looking forward to.”

How else could EIS and SEIS be improved to help SMEs get the economy growing post-Brexit?

Greater awareness among businesses themselves. A joint government and EISA campaign promoting the benefits of EIS and SEIS would help raise businesses’ awareness of the schemes and present a powerful message to SMEs that the government wants to help them.

The deadline is 10 October, 2016.

Edge takes on two senior investment personnel Edge Investments, which specialises in the creative industries sector, and whose funds include Edge Performance VCT and Edge Entertainment EIS, has appointed Steve Carle as Investment Director and Joanna Smith as Investment Manager.

Investments. They each bring a different and valuable set of skills and investment experience to our investment team and I believe the combination will enhance our core team to the distinct advantage of both our investors and the management teams of our portfolio companies.”

An experienced private equity and venture capital specialist, Carle has had a 20-year-career with the UK’s two leading mid-market private equity companies, 3i Group and LDC, the private equity arm of Lloyds Banking Group. He left in 2010 to take on a number of private business opportunities, before joining Edge.

Edge’s previous investments have included live events featuring Jennifer Lopez, Eric Clapton, Leonard Cohen and the Rolling Stones, and children’s entertainment The Clangers, Beast Quest and Poppy Cat.

Smith has spent her career in finance both in practice at PwC and then in an investment role at Channel 4. There she launched a new fund to invest in UK independent television production.

The pair will focus on the £40 million Edge Creative Enterprise Fund, launched in November 2015 with backing from the British Business Bank. They will also manage Edge Performance VCT, a specialist venture capital trust focusing on the creative industries and the technologies that enable them, and its portfolio companies.

David Glick, Chief Executive of Edge, said: “I am very pleased to officially welcome Steve and Jo to Edge

November 2016 · www.eismagazine.com

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BREAKING DOWN BARRIERS WITH GREAT BRITISH INVESTMENTS

There are numerous products available within the long established EIS, VCT and BPR market that are not only providing valuable support and investment for the UK economy, for start-ups and fledgling new businesses – but also provide great prospects for superior investor returns too.

It’s a market that is worth billions, has the support of the government and can offer outstanding returns and tax benefits. Yet these are often overlooked by advisers when planning client investment portfolios due to fears around risk and effective due diligence.

INFORMATION

MEMORANDUM For further information, please contact

Nicola Johnston Head of Finance nicolajohnston@chfmedia.com +44 (0)845 512 1000

www.chfenterprises.co.uk i

Mark Brownridge (pictured), who became Director General at the EIS Association (EISA) earlier this year, said advisers were open to the opportunities provided by EIS, VCT and BPR.

At IFA Magazine’s Great British Investment Roadshows we’ll be getting down to detail, looking at what works and what doesn’t as well as helping you to ensure that you get the information you need upon which to make appropriate recommendations to clients. Join Mark Brownridge and the IFA Magazine Events team at the roadshows which are exclusive to the adviser community and are taking place in London on 15 November and Edinburgh on 22 November.

Find out more at www.ifamagazine.com/events.

“Since joining EISA, I’ve been taken aback at how readily advisers are willing to share their views on investing in EIS and other attractive asset classes,” he said.

“The subject always generates plenty of debate and discussion but what is clear is that investing into these asset classes, which is about a whole lot more than just their tax efficiency, is moving out of the shadows and is increasingly entering the mainstream investment arena.

“What I’m hearing from advisers and planners now is that their focus is on how to break down some of the barriers to advising in this area and make the most of the opportunities available. The good news is that advising in this area doesn’t have to be onerous or complex compliance wise. There are some very simple steps you can take to boost the potential returns available and reduce the risk of investment such as diversifying across a portfolio of investments and undertaking comprehensive due diligence.”

Isn’t it time you became more familiar with the detail of these schemes? If so, that’s where IFA Magazine Events can help. Of course, these products are not going to be suitable for each and every one of your clients, however these are rapidly establishing themselves as mainstream investments which fully deserve their place as part of a diversified investment portfolio.

November 2016 · www.eismagazine.com

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AIM STOCKS TO HELP MAKE INHERITANCE TAX SAVINGS Douglas Lawson, Director at Amati Global Investors, looks at the current prospects for AIM stocks

Inheritance tax (IHT) planning is all about saving tax.

Assets that qualify for business property relief (BPR) are exempt from IHT, potentially saving the deceased’s beneficiaries a 40% tax bill.

For this reason, the starting point for considering a specific BPR qualifying asset must be: is my (realistic) maximum loss on this investment less than 40%.

One such BPR qualifying asset is unquoted shares, including those listed on the Alternative Investment Market (AIM) of the London Stock Exchange. Portfolios of AIM shares have been an increasingly popular destination for IHT planning. It is difficult to know how much money has gone into AIM IHT portfolios due to the lack of disclosure from some providers of the service but the best estimate we can find is from Intelligent Partnership, which puts the number at £750 million.

If the starting point is avoiding losses, rather than making profits, it is logical to assume that investment managers will seek out the least risky shares listed on AIM. Most would interpret ‘least risky’ as the largest, most liquid shares on AIM. The largest share on AIM is ASOS, the online clothing retailer, which is capitalised at £3 billion and trades an average of £27 million of stock every day. Even if every AIM IHT manager held a 5% position in ASOS, the combined holding would be worth £37 million (5% x £750 million of AIM IHT assets under management) and could be traded (theoretically) in under two days. On this basis, ASOS certainly ticks that size and liquidity box.

Below ASOS, the AIM top 10 was made up of the following stocks as of 3 June 2016: GW Pharma (a biotech specialising in cannabinoids across a range of therapeutic

areas); ABCAM (the online sale of antibodies); Hutchison China Meditech (a diversified, Chinese healthcare business); Dart Group (operator of the Jet2 airline and holiday business); James Halstead (a manufacturer of flooring products); Fever-Tree (a producer of premium tonics and other drinks mixers); Breedon Aggregates (a supplier of asphalt and concrete); Plus500 (an online platform for trading contracts for difference); and Burford Capital (a litigation funding business).

This is an interesting list of stocks, all of which we believe qualify for BPR. Two of these stocks (GW Pharma and Hutchison China) are loss-making but the other eight stocks trade on a mean forward price/earnings ratio of 27.5x.

The chart shows that the FTSE 100 trades in a price/ earnings ratio range of 16-18x, tapering to 14-16x in the FTSE 250 and upper end of the FTSE Small Cap, before falling to a 10-12x range by the bottom of the Small Cap Index. With AIM, there is a very prominent spike at the top of the market at around 20x earnings before the market falls to a range of 12-16x. Closer to the bottom of AIM, the rating settles in the 10-12x range.

Few would consider the stocks at the bottom of AIM to be suitable for an AIM IHT Portfolio, but there appears to be a sweet spot of stocks below the spike that offer a significant discount. A discount to reflect reduced

20x

To prove that these are not anomalies, we extend this list to encompass the next 10 largest AIM stocks that quality for BPR, EMIS, Clinigen, Mulberry, BooHoo, PureCircle, 4D Pharma, Nichols, RWS, CVS, First Derivatives and we find that, excluding one outlying stock, the aggregate rating falls slightly, but only to 27.0x price/earnings ratio. By most measures, this is an expensive price/ earnings ratio.

In certain circumstances, a high rating can be justified by the very high growth prospects of a business. Fever-Tree, for instance, has a price/earnings ratio of 43.0x but 2016 earnings per share (EPS) is expected to be 44% higher than 2015. However, several of these stocks with high ratings have low growth prospects. James Halstead is rated at 24.6x but EPS growth is expected to be 5.9%.

Under normal circumstances, this would be considered expensive, even for a company with the undoubtedly high qualities of James Halstead.

FTSE 100

FTSE 250

FTSE

SMALL CAP

FTSE

AIM ALL-SHARE

6x £20m FTSE All Share stocks in mkt cap order

EIS Magazine · November 2016

The conclusion to be drawn from this is that a large proportion of investment into AIM companies for IHT planning has gone into a comparatively small number of stocks at the top of the AIM market. This has had the predictable effect of squeezing up valuations as AIM IHT inflows chase a relatively fixed number of stocks. There are undoubtedly good quality companies in this area but valuations at the levels discussed, without growth rates to support the price/earnings ratings, should be treated with caution.

The chart below is compiled by Liberum Capital and illustrates the distortion of valuations within AIM.

£100bn

12

liquidity would be expected but the variance that has opened up appears extreme.

AIM stocks in mkt cap order

November 2016 · www.eismagazine.com

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MARKET VOLATILITY FAILS TO DAMPEN APPETITE FOR ALTERNATIVE INVESTMENTS Annabel Brodie-Smith, Communications Director at the Association of Investment Companies, examines why VCT fund-raising has been so strong It’s been a highly eventful time with the Brexit decision and political shenanigans dominating the news agenda (and everything else!). It will inevitably be a while before the dust settles and we understand the longterm implications of the referendum result.

Despite the market volatility in the first quarter of this year, the VCT sector raised £457.5 million in the 2015/16 tax year – the third highest total on record. This compares to £429 million in the 2014/15 tax year, which itself was a strong year for fundraising and was the fifth highest on record.

So why was the 2015/16 tax year quite so strong for fund raising? Well the previous Chancellor’s pension revolution has had an important impact on demand for VCTs. First came the ‘freedoms’: Lamborghinis, the death of annuities, pensions as ATMs. Then, the turn of the screw: annual and lifetime allowances both cut, plus a tapering away of the annual allowance for high earners to as little as £10,000.

Though top earners are the most affected by all this, it’s surprisingly easy to reach the lifetime allowance over a career – pension savings of £418 a month over 40 years, at a growth rate of 7%, will see you hit the £1 million jackpot (or rather, HMRC hits the jackpot, because an investor becomes subject to tax of up to 55% on the excess).

One possible way to counter this is to use VCTs to supplement pension savings and this partly accounts for the recent popularity of VCTs. The tax benefits are comparable to pensions, with upfront income tax relief of 30% on new VCT shares provided they are held for

NO SOUTH EAST BIAS HERE

five years. But the contribution limits are much more generous: up to £200,000 a year, and no lifetime limit.

There’s also no tax on the way out: both dividends and capital growth are tax-free.

Of course, the risks of VCTs are clear: the companies they back are small and some will fail. But average VCT performance over the long term has been respectable, with a total return of 107% over the past 10 years, which excludes the 30% tax relief, and the average yield is 9.2%, largely generated from the profits VCTs make when they sell businesses. All this is very welcome at a time when the benefits of pensions are increasingly constrained.

It’s thought-provoking to hear managers’ views on the demand for VCTs. Stuart Veale, Managing Partner of Beringea LLC and Manager of ProVen VCTs, says: “Private investors are turning to VCTs in ever greater numbers, attracted by the sector’s strong historic performance, including regular tax-free income, enhanced by the initial 30% income tax relief.”

Paul Latham, Managing Director of Octopus Investments, says: “Investors are increasingly using VCTs to complement their existing portfolios and to take advantage of the tax incentives available, which we believe is demonstrated by the 74% increase in £50,000-plus VCT applications Octopus received in 2015 compared to 2013. This also seems to be an indication that the government’s recent efforts to address tax avoidance, has moved many investors towards government-approved schemes that are recognised as a vital source of funding to grow the UK economy.”

VCTs haven’t been immune from Treasury rule changes – in fact, there have been frequent alterations to the scheme since it was launched in 1995. In the Budget last year, the chancellor announced that VCT money could no longer be used to support companies that made their first commercial sale more than seven years ago – effectively limiting the scheme to young companies, although there were a number of exceptions to this rule.

The exceptions include a longer time period of up to 10 years which will apply for ‘knowledge-based’ companies.

In addition, no time period will apply where the total amount invested represents more than 50% of the annual turnover (averaged over five years) of the investee business. Management buy-outs, or any other deals in which the control of a business changes, were also outlawed. The chancellor has also introduced a lower than expected lifetime investment limit, which will be £12 million rather than the £15 million previously announced.

An exception will be made for investment in ‘knowledgeintensive’ companies, where the limit will remain at £20 million.

While any restrictions on what VCTs can do are unwelcome, it’s worth remembering that VCT managers are experienced in dealing with moving goalposts. In 2006, for example, there was a radical change in the size of companies VCTs could invest in, with the gross asset limit slashed from £15 million to £7 million and the maximum headcount of an investee company from 250 to 50. Concern was expressed, but VCTs still found worthwhile companies to invest in until the changes were reversed in 2012.

Some advisers’ clients may be interested to know that the money they invest in VCTs is used to grow UK businesses, especially if they have run and grown businesses themselves. The Association of Investment Companies estimates that the average company securing VCT investment has gone on to create 51 jobs and grow average turnover by £12.7 million comfortably returning HMRC’s ‘investment’ in the form of national insurance contributions, corporation tax and other business taxes.

Looking in greater detail at the AIC’s latest VCT industry survey there are a number of economic benefits. The top sector for VCT investment was technology and IT, followed by business services, and manufacturing

The benefits of VCT investment are often immediate and analysis of SMEs that received initial investment in 2013 show that 77% of companies increased their turnover by an average of £1.5 million the following year. In Scotland alone there was an increase in turnover of 34% for investee companies. It’s interesting, post the referendum decision, that in 2014 39% of VCT investee companies generated turnover from exports. This figure is higher than the previous year and higher than the average for SMEs across the UK. Overseas markets accounted for 30% of the turnover of exporting investee companies.

The perception that VCTs deliver value for money is one reason they have survived several changes of government and rules since being launched by then Conservative chancellor Ken Clarke 21 years ago. Interestingly, the VCT scheme has even been studied by other EU nations, including France, as an example of how growing businesses can be supported by channelling tax relief.

All of this makes VCTs an interesting vehicle to supplement a pension in these uncertain times and it’s not surprising that fund raising was so high this tax year in light of the pension changes. Both are long-term – pensions by definition, VCTs because of the nature of the asset class and the structure of the tax wrapper. VCTs are inherently risky – otherwise tax breaks wouldn’t be available – but experienced managers and diversified portfolios of companies go some way towards mitigating those risks.

£2.32m

CREATING

55%

The survey also clearly highlights VCT’s ability to address the ‘finance gap’ affecting SMEs seeking funding between £250,000 and £5 million. The average size of the initial VCT investment in an SME is £2.32 million which rises with follow-on investments to an average of £3.01 million.

AVERAGE SIZE OF INITIAL VCT INVESTMENT IN A SME

VCT SECTOR

AVERAGE COMPANY SECURING VCT INVESTMENT

and engineering. Interestingly, the technology and IT companies that have received VCT investment boast a 212% increase in employment levels. The majority of VCT investment (55%) was invested outside London and the South East across the UK. While London continued to attract the largest share of VCT investment in 2014 (26%), it is particularly significant that Scotland received 20% of VCT investment in comparison to an average of 8% in previous years. The North of England also benefitted from an increase with 13% of investment, up from an average of 11% in previous years.

51

£457.5m RAISED

JOBS

AVERAGE TURNOVER

The majority of VCT investment (55%) was invested outside London and the South East across the UK.

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EIS Magazine · November 2016

£12 7m

2015

2016 November 2016 · www.eismagazine.com

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TIME TO CELEBRATE: AIM HAS COME OF AGE The Alternative Investment Market has turned 21, and Richard Power, Head of Smaller Companies at Octopus Investments, looks at what makes it a success Having recently celebrated its 21st birthday, the Alternative Investment Market (AIM) has faced more than its fair share of character-building events through the years.

AIM by value was exposed to companies in the resources sector. Therefore, neither Brexit nor the proposed merger between the LSE and Deutsche Boerse should hold any fear.

Back in 2000, the junior growth market of the London Stock Exchange (LSE) survived the aftermath of the dotcom bubble, a turbulent period which hastened the demise of its French and German counterparts. AIM also successfully navigated its way through the global financial crisis. In fact, in 2008 and 2009, when other financing doors were being slammed shut, fast-growing AIM-quoted companies managed to raise £10 billion. The resilience of AIM was tested once again in 2010, as the commodity price bubble deflated, by which time 45% of

The secret behind the success of AIM is its ability to evolve.

When it was launched in 1995, AIM was intended to be a platform for small growth companies to gain access to capital. In that respect, it has succeeded spectacularly, raising over £96 billion of funding on behalf of over 3,600 companies, supporting over 750,000 UK jobs. The indirect impact of AIM – for example benefits to suppliers and employees spending wages, shows total economic contribution of £25 billion of GDP, which is more than the UK’s aeronautical or pharmaceutical industries.

Not all plain sailing But while investors may choose to access AIM through direct investments, the necessary due diligence requires time, resources and experience. It’s in the nature of smaller companies that not all of them will survive.

Therefore, investing via a dedicated AIM-focused fund is likely to alleviate some of these concerns, while potentially also increasing the diversification benefits to investors.

Active management generates most value when an asset class is inefficiently priced. This is certainly the case with smaller companies where a lack of research and market coverage creates pricing inefficiencies, which are typically exacerbated following a period of volatility. Expertise and focus in smaller company AIM-listed shares therefore creates the opportunity for significant outperformance, and active management can bring the potential of AIM to life for investors.

Successive governments have acknowledged the importance of AIM as part of the UK’s growth capital ecosystem, and a number of AIM stocks offer tax incentives designed to encourage those investors prepared to take on the higher risks associated with backing smaller companies. Tax incentives made available through EIS

and VCTs have played an important role in maintaining investor appetite across the full market cap spectrum on AIM. Alongside these is another valuable incentive called business property relief (BPR). Shares that qualify for BPR become exempt from inheritance tax after two years, provided the investor still holds the shares upon death. In addition, the government has abolished stamp duty on the purchase of AIM-quoted shares and further broadened the market’s appeal by allowing AIM-quoted shares to be held via an ISA. In short, there are many ways in which investors can capitalise on AIM stocks tax efficiently.

The best way for investors to approach smaller companies is to take a long-term outlook. As the chart below demonstrates, while the asset classes are not comparable on a like-for-like basis, smaller companies have outperformed larger companies considerably over longer time periods. There’s no real mystery here – smaller companies simply grow their earnings faster. Therefore, provided investors have a long-term horizon (of more than five years), and are willing to accept higher risks in pursuit of higher potential returns, actively managed AIM portfolios offers enormous investment potential.

AIM: the facts and figures Low Volatility, High Potential

900

• Since its inception in 1995, the market has supported more than 3,500 AIM companies.

• By the end of 2014, UK-incorporated AIM companies represented 81% of all new admissions to AIM and 80% of the total stock of AIM companies.

• AIM companies contributed £14.7 billion to UK GDP and directly supported more than 430,000 jobs in 2013.

To put these numbers in context, the UK aerospace and automotive industries – two of the UK government’s key industrial sectors – make an economic contribution of £9.4 billion and £11.5 billion respectively, while the UK pharmaceutical sector contributes £13.3 billion.

• AIM companies made a significant tax contribution of £2.3 billion to the Exchequer

AIM is home to a wide variety of companies that offer the potential for growth and dividends. The market has had some tremendous success stories over the years. When online fashion retailer ASOS turned to AIM in 2001 as a very small loss-making e-commerce business, options for growth capital were limited. The dotcom bubble had burst and confidence in online business models had been severely damaged. ASOS found the funds it needed via

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EIS Magazine · November 2016

AIM and has since gone on to become a global success story, currently valued at over £3 billion. Today, AIM is thriving and attracting a range of UK success stories.

Well-known British brands, including Fever-tree, Joules and Hotel Chocolat, have all recently turned to AIM in order to fund the next stage of their growth.

Over the years, AIM has succeeded by staying true to its founding principles: accessibility for ambitious growth companies, open to investors of every kind, a regulatory approach that recognises the needs and capacities of growth companies, and a market open to learning and evolution. Such positive attributes are needed now more than ever. In other countries, many of which have failed to establish a market for smaller companies, AIM is envied as a great source of long-term finance for innovative, aspirational companies requiring capital to reach their full potential. We don’t expect that to change any time soon.

0 1995

2016 FTSE All-Share TR

IA UK Smaller Companies TR

Source: Lipper, 30 June 2016. Indexed Performance, Total Return from 30 June 1995 - 30 June 2016

November 2016 · www.eismagazine.com

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BEYOND IHT - THE WIDER BENEFITS OF BUSINESS RELIEF

qualifying investee companies use an LLP or LP structure but these are less frequent and are predominantly used for corporate investors.

Low yields and uncertainty around Brexit means interest in business relief is increasing, says Jack Rose, Head of Tax Products at LGBR Capital With interest rates at record lows and forecast to remain below 2.5% for over seven years, today’s low yield environment continues to be the ‘new normal’ for investors and presents a significant challenge for income seekers. The UK’s decision to opt for Brexit (whatever that ends up meaning) has also seen volatility return to mainstream asset classes, equities and FX in particular.

6

When comparing providers, although the overall structure may look very similar, one key point of difference is the underlying investment strategies and sector focus.

Obviously it is extremely important to understand the specific underlying sector or nature of the investee company’s business, because this, like any business, carries its own opportunities and threats, which investors need to be aware of and be comfortable with.

There is a plethora of different sectors available for investment, from renewable energy, secured leasing/ financing, property lending to media and many more.

Potential target returns also vary from cash plus to equitylike returns, although the majority of products offer returns in the range of 3-6% alongside capital protection.

With the Bank of England’s base rate at 0.25%, you can see the attraction.

As the IHT product space grows and matures, there is now an increasing number of product providers who can demonstrate track records of delivering these returns across multiple market cycles. Of course it goes without saying that any past performance is certainly no guarantee to future performance.

The below graph provides a good illustration of these steady uncorrelated returns against wider equity markets:

60%

British Pound Swaps Curve - Projection

0% Apr 06

Apr 16

0 Jan 2009

Source: Bloomberg 16/09/16

Jan 2025

This has been the backdrop to an increased interest in products using business relief (BR), many of which aim to provide capital preservation and attractive levels of regular income alongside their primary focus of inheritance tax (IHT) mitigation for investors. In conjunction with HMRC’s IHT receipts for the 2015/16 tax year hitting an all-time high of £4.6 billion (with an increase to c.£5 billion forecast for the current tax year) the demand for IHT products looks set to continue to grow.

‘additional’ benefits has increased, so has the profile and popularity of BR focussed solutions.

Business relief is not a new piece of legislation (it was introduced in the 1970s) but it is only relatively recently in the past 10 years or so - that it has grown in popularity with advisers and investors.

• those that invest in a portfolio of AIM stocks – seeking growth and income whilst also qualifying for ISA investment

Historically advisers tended to rank BR solutions behind more traditional estate planning options such as trusts.

However, as trust rules have become ever more complex, BR has continued to grow in popularity as the greying population demands more dynamic and flexible estate planning options.

The benefits of BR relating to its speed (only two years before IHT mitigation), control and flexibility (investors own the underlying asset) are well known. Less well known are advantages such as replacement relief that allows investors to move from one BR qualifying asset to another without restarting the two year IHT exemption clock, so long as they have held shares in any BR qualifying asset for two of the last five years, which is a real advantage for business owners.

Another is the ability for advisers to utilise BR in cases involving Power of Attorney. As awareness of these

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Correspondingly the market for BR products offered by investment managers has seen a dramatic expansion, with over sixty different options now available and several managers with track records of more than 10 years.

-80%

Triple Point Generations Strategy Fund

Aim All Share TR

FTSE 100 TR

IHT strategies that utilise BR can, at a basic level, be divided into two buckets;

• and those that specialise in alternative asset backed strategies, focusing on capital preservation Here we will focus on the latter bucket, as these investment strategies can provide attractive levels of regular income with low correlation to traditional asset classes, as we mentioned at the top of the article. Investing in AIM stocks can also provide the opportunity for long term capital growth and income - but it does, as you would expect, have a high correlation to equity markets and therefore comes with a level of associated volatility.

Preserving capital Most capital preservation IHT products are usually structured as discretionary managed services, in which investors are allocated shares in one or more underlying, investee companies. It is these companies which qualify for BR and in which the investor holds shares. Some

Belinda Thomas, Director of Triple Point Investment Partners, which has specialised in IHT products since 2006 agrees: “BR qualifying investments are increasingly becoming more mainstream, as a complementary addition to a client’s existing portfolio, given that their returns tend to be uncorrelated to the traditional asset classes.”

Choosing the right solution So how should investors and advisers choose between the sixty or so different options available in the market?

All the points previously mentioned are important areas to consider, such as such as track record, returns (after fees) and the underlying investee company. But there are others such as liquidity, size of the offering, the pedigree and expertise of the investment team.

For investors keen to research the market there are a number of independent sources that offer due diligence and research such as; The Tax Shelter Report, The Tax Efficient Review and MiCap. As with most investments a diversified approach is a prudent way to manage some of the risks, not just utilising different providers but more importantly diversifying by underlying trade or business sector of the investee companies.

The last aspect to consider is accessibility. Many of these solutions are structured as discretionary managed services that invest in one or a small number of unquoted businesses, which means the risk profile will not be suitable for all investors. For advisers recommending these types of strategies for clients there are also considerations around PI and compliance. Also, they are also not available on mainstream platforms which increases accessibility issues.

In conclusion, the benefits of BR strategies such as speed of IHT mitigation, control for the investor in directly owning the underlying asset, replacement relief and Power of Attorney make them useful tax-planning products. However, whilst not without risk, these products can also provide an attractive yield in today’s low income environment alongside their capital preservation objective which widens investor benefits beyond the obvious need for estate planning– as long as investors have assessed the important considerations such as diversification, the business sector and the expertise of the provider’s investment team.

November 2016 · www.eismagazine.com

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Why choose a

‘Smart Passive’ approach to tackle IHT?

AIM recently celebrated its 21st birthday, and over those years the index has evolved hugely. As of June 2016, there are now 829 UK and 187 international listed companies on AIM with a combined market value of £74 billion, a substantial growth from when the index launched in June 1995, with just 10 UK-listed companies, which had a combined market cap value of over £82 million.

However, one aspect of investing in AIM has remained constant during its lifetime – the way in which investors are able to access the market. Considered a high-risk investment, owing to the junior nature of many of the companies listed on the index, investors have trusted their money with active fund managers in the hope they can pick the winners on their behalf.

But what if there was another way? One which reduced the volatility of investing in this asset class, thereby reducing some of the risk associated with AIM? At the same time, what if this service could help mitigate a client’s inheritance tax (IHT) liability, which is an increasing problem for many people?

TIME Investments believes it has found the answer and has launched the first AIM IHT service that adopts a ‘smart passive’ approach to AIM investing. The TIME:AIM service offers investors the opportunity to reduce their IHT liability after just two years using Business Property Relief (BPR), via a portfolio of 20 to 25 qualifying shares which are all constituents of the AIM 100.

What is ‘smart passive’?

TIME’s investment methodology employs a series of rigorous criteria, to select a portfolio of typically 20 to 25 shares of the largest, most mature and robust BPR qualifying companies available within AIM. The portfolio will be rebalanced periodically to ensure it continues to include the most appropriate AIM companies and a balanced weighting for each holding. TIME’s focus is to acquire shares in the largest AIM companies available, meaning a portfolio will typically be limited to the companies found on the FTSE AIM 100.

TIME believes that mature, profitable businesses provide the best risk-adjusted returns for investors seeking to mitigate IHT via a portfolio of AIM shares. Consequently, its screening process favours those companies which have sufficient free cashflow and retained earnings to pay dividends.

Why the ‘smart passive’approach?

TIME’s smart passive approach seeks to remove the subjectivity of decision making and emotional bias which can affect the investment decisions made for portfolios which are actively managed by a fund manager. The smart passive approach uses verifiable financial and commercial information published by AIM companies to determine the portfolio of shares for an investor, rather than relying on an individual stockpicker’s opinions regarding the future commercial success of AIM companies and the quality of their management teams.

The smart passive approach provides a robust investment strategy which is less exposed to human risk factors, such as the departure of a fund manager or stockpicker bias.

A welcome secondary benefit of this approach is that TIME are able to offer this service at almost half the annual management fee of many of the traditional AIM and AIM ISA fund managers.

How does ‘smart passive’ work?

In short, BPR qualification is essential. The AIM market contains a diverse range of over 1,000 companies, many of which will not qualify for BPR as they conduct excluded activities. TIME will evaluate each AIM company which passes the screening process to ensure that BPR should be available on the shares. All AIM companies in the portfolio will be regularly monitored by the TIME investment team to ensure that BPR continues to be available.

Investor’s portfolios will be rebalanced on a periodic basis, to refresh the portfolio with the AIM companies as selected by the smart screening process. The rebalancing process will also ensure that an investor’s holdings are evenly weighted. This way, no individual AIM company will represent a significant part of the overall portfolio value for a prolonged period of time. This approach seeks to reduce the specific risk to investors of a material downturn in a particular company’s trade.

TIME’s track record TIME provides tax efficient investment solutions, with their original IHT service boasting a 20 year track record of successfully achieving IHT savings for investors. Winner of Best BPR Manager 2015, TIME’s service was one of the first to use BPR to offer IHT mitigation for investors and holds the longest track record in this market.

If you would like to find out more about TIME:AIM please visit:

time-investments.com or alternatively, you can call us on:

020 7391 4747

AIM: A STOCKPICKER’S MARKET FOR IHT PLANNING Love it or loathe it, the AIM market cannot be ignored, according to Chris Hutchinson, Director of Unicorn Asset Management The Alternative Investment Market (AIM) is one of those markets that divide opinion.

Many private investors believe in the high growth investment opportunities to be found on AIM and appreciate the generous tax benefits available from investing in AIM. However, other investors avoid AIM because of some of the horror stories surrounding individual company failures and the relatively poor performance of the headline FTSE AIM Index over the past 20 years.

So who is right? The short answer is that both views are valid.

The poor performance of AIM is well documented. Since inception the FTSE AIM All-Share Index has returned -2.41% on an annualised basis; hardly stellar returns.

Then there are the stories of high profile failures like African Minerals, Globo and Quindell, as well as concerns over the lack of regulatory oversight within the market.

It is true that the regulation and listing requirements for companies seeking a listing on AIM are less onerous than those for companies seeking a main stock exchange listing. For instance, unlike a full listing, companies are not required to produce financial records for at least the past three years nor do they need a minimum market capitalisation amongst other things.

But there is a far more positive side to the AIM story that deserves to be heard. Part of the rationale behind the less onerous regulatory framework was to create a more flexible environment in which smaller, less mature companies could raise capital. Since its launch over 20 years ago the AIM market has helped over 3,500 companies to raise capital through listing on the index.

While many other junior markets have failed, AIM has continued to grow from representing just 10 companies at inception to over 1,000 today with a combined market capitalisation of over £75 billion as at the end of August 2016. There are now 70 AIMlisted companies which have a market cap of £250 million or more, including some household names such as ASOS and Fever-Tree.

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EIS Magazine · November 2016

Government support AIM continues to be supported by the UK government, which clearly recognises the stimulus that AIM can provide in terms of capital funding and employment creation. As a result, the tax benefits available remain attractive to private investors. Many companies that seek a listing on AIM are eligible to receive State Aid funding under the government’s tax-advantaged VCT and EIS schemes, while the abolition of stamp duty and the ability for individuals to hold AIM stocks in their ISAs has helped attract a broad range of investors (and their capital) to the market.

For those investors willing to do the work, AIM presents an opportunity to unearth investments with the potential to deliver meaningful returns. Many of the companies listed on AIM do not receive the same level of analyst research and broker coverage that is afforded to companies listed on the main market. AIM is therefore a market that represents both risk as well as significant opportunity. For investors willing to diligently sift through the whole market there are some real gems to be discovered.

Success stories such as Numis and Abcam are just a couple of examples of tremendous AIM listed companies that can be highly rewarding as investments if you have

AIM continues to be supported by the UK government, which clearly recognises the stimulus that AIM can provide in terms of capital funding and employment creation

probably to delegate responsibility to a professional fund manager with the expertise, experience and resources to identify opportunities on behalf of their investors, thereby helping to mitigate some of the risk.

the time and resource to unearth them. Numis now has a market cap of c.£250 million and has returned well over 7,500% since it first listed.

Abcam is a great example of how well the AIM market can work for profitable, high growth, high quality businesses.

Abcam is a producer and marketer of quality protein research tools. These tools enable life scientists to analyse cells at a molecular level, which is essential in a wide range of fields including drug discovery, diagnostics, and basic research. It is a profitable and highly cash generative business with a leading position in a growing niche market, a strong record of organic growth and an experienced management team.

We follow a rigorous investment process and apply strict criteria when researching new businesses. This approach allows us to uncover some of AIM’s hidden gems and, perhaps more importantly, helps us to avoid the failures.

From a market capitalisation of £57 million at flotation on AIM, Abcam has grown to become a £1.7 billion business and crucially it is still listed and thriving on the AIM.

Professors Dimson and Marsh of the London Business School summarise this thought in a particularly succinct way: “Everyone says AIM is a stockpicker’s market, but what they mean is that there are extremes of performance – both on the downside and the upside…the best people equipped to sort the wheat from the chaff are the professional investors.”

So, if it’s best to leave the stockpicking to the professional investors what products do they offer for private investors?

Although it is possible to gain exposure to AIM through a variety of different products (OEICs, Investment Trusts & Enterprise Investment Schemes) the two most popular investment vehicles for private investors are VCTs and the AIM IHT ISA Portfolio Service. As mentioned earlier, attractive government legislation has proved extremely important in supporting investment into the AIM market and none more so than the changes made in August 2013, which for the first time allowed people to invest in AIM stocks through their ISAs.

Failures vs successes

Although investing in AIM companies for IHT mitigation is not a new phenomenon (it has been possible for decades), the changes to ISA rules in 2013 were a catalyst for new wave of investment into AIM from investors looking to mitigate IHT by switching at least a portion of the value of their ISAs out of fully listed companies and into AIM quoted companies.

It is clear however, that despite being able to point to success stories such as Numis and Abcam, the failures outnumber the successes on AIM. For private investors with limited resources to accurately identify opportunities, the risk of making investment errors is greatly increased.

The most effective strategy for investing in AIM is

This rule change opened up the market for specialist providers to manage assets in a previously inaccessible marketplace – there are now at least 22 million ISA account holders which together represent over £500 billion in total assets and so it is clear that this represents a significant opportunity.

November 2016 · www.eismagazine.com

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The IHT issue This has been fuelled by a growing IHT issue for many people. To put this in context, IHT receipts have increased 60% in the last five years with a record £4.6 billion taken in IHT receipts last tax year. Investing in AIM listed companies that qualify for Business Relief (the government legislation that affords them IHT relief) can provide a welcome solution for clients. It is difficult to come up with a precise figure for the amount invested on AIM for this purpose but we estimate around £1,000 million. There are over 20 different providers offering AIM-based IHT solutions, which means clients have plenty of options to consider, but with so many providers offering access to a similar service how should investors decide between them?

Obviously, cost is an important consideration and it is essential to look at all the charges including any dealing and custodian fees that could be levied. However, I would suggest that looking for managers with a long track record of investing in and managing AIM portfolios should be the most significant consideration.

Does the manager have a robust investment philosophy?

How well resourced is the investment team and how

much experience in AIM investment do they have? How long have they managed AIM portfolios?

Although past performance is no guarantee of future performance, managers who have managed AIM portfolios over multiple market cycles should give greater confidence in their investment approach. A track record in managing tax advantaged portfolios is key, as the rules around tax-advantaged structures can be complicated. It is also important to be able to demonstrate an investment track record in AIM (either in a tax structure, or outside one) - it is pointless having an expert understanding of the legislation if the underlying investment does not perform. It needs to be clear from the Manager that this is an investment-led solution, not just a clever solution to a tax issue.

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As a final thought for those considering tax advantaged products, there are several independent research sources which review providers and can provide due diligence such as; The Tax Shelter Report, The Tax Efficient Review and MiCap. Finally, as with many investments, diversifying across several providers can help to spread and reduce investment risk.

As specialists in branding and marketing for IFAs, we can make sure more of your time is focussed on the things that are important to you: your clients. Whether you need a website, a new brochure, rebrand or marketing support, talk to us today and let us take the marketing strain.

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Although past performance is no guarantee of future performance, managers who have managed AIM portfolios over multiple market cycles should give greater confidence in their investment approach

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EIS Magazine · November 2016

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www.fanaticdesign.co.uk

HOW TO FIND THE NEWEST EIS OPPORTUNITIES With record numbers of companies being formed, finding the next big thing can be difficult for advisers, but Shane Smith, Founder of Intelligent Crowd TV, believes he can help

The UK saw a record number of new company formations last year, just short of 600,000, and the most recent data for 2013/14 shows 2,000 companies receiving SEIS funding.

When we consider that investing usually or ideally requires a meeting, that represents a lot of investment opportunity, but also drives a lot of work – for both investors and entrepreneurs. Just a thousand companies meeting a thousand investors over the course of a year adds up to a million meetings. There has to be a better way.

Late last year, Intelligent Crowd TV launched The Seed & EIS Hour, a weekly one-hour chat show and pitching

format that gives founders a stage to explain their propositions (live-streamed), and gives investors a way to gauge the quality of the founding team and its proposition, quickly and efficiently. With support from Argus Research, the leader in pre-IPO research in New York City, and audience Q&A via Skype, the program is designed to be a 15 minute fast-track to getting under the skin of a deal.

Here we’ve selected three recent pitches which are currently open for investment, as well as Edukit which successfully seed-funded in our first series and is preparing to return for Series A funding:

FilmDoo Sector: Consumer staples FilmDoo is an online video-on-demand (VOD) platform focused on helping people to discover and watch great films, short films and other content from around the world. Unlike other VOD platforms, FilmDoo focuses on building a thriving film community and empowering users to drive social recommendations and to help bring a film to their region, a game changer and disrupting the way traditional film distribution currently works. FilmDoo makes it easier, fun and engaging for people to discover films they would otherwise not hear about while bringing greater transparency and data analytics to the film industry.

Rotor Videos Sector: IT Rotor is a new technology for making music videos online, in a matter of minutes. It is a cloud-based tool, so everything takes place in the Rotor website. All the user needs to do is sign up and follow three simple steps – load in their song, choose how they want their video to look with one of our style templates and choose which video clips to use. If the user doesn’t have their own clips, we have a stock library they can choose from (currently, 75% of our paying customers use only stock clips).

Rotor creates a preview of the video in about 3-5 minutes. If they like the preview, they can buy the high resolution version – starting at £5 and up to £25 for full HD. If they don’t like the preview, they can change the clips and style. Rotor is fast, inexpensive and simple to use. We have early traction with the consumer market and also with the B2B offering. We’re now entering our next phase of development.

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EIS Magazine · November 2016

Edukit Sector: IT/Ed-Tech EduKit is an online platform that connects schools with thousands of opportunities and programmes that can help children and young adults. Youth service providers spend over £350 million annually on ineffective marketing to schools. We will be the place where a significant proportion of this is spent. Given that schools receive £2 billion-plus annually specifically to support low-income pupils, EduKit helps schools to identify suitable programmes for pupils and to demonstrate to Ofsted, their governors and other stakeholders that these have achieved tangible results. We have strong traction with thousands of users at 78 schools and over 800 providers actively using our platform. We have also won awards from the Department of Education, UnLtd BVC and Sirius (UKTI).

How Intelligent Crowd TV works: We advocate a simple portfolio selection process, guided by these principles:

• Focus on SEIS, where your exposure to any individual company is typically limited to around 28p/£ • Focus on the team behind the company/idea • Understand the “big picture”, from an independent analyst • Recognise that one or two big “winners” will massively skew your portfolio return, but don’t try to find that single “winner” or the unicorn.

Rather, if the chances of a winner are one in 100, make sure you have 100 companies in your portfolio • Focus your effort on selecting these 100 from a curated pool, where the more obvious nonstarters have already been eliminated – and your time requirement is reduced • In your selection process, avoid the pressure of herd mentality For The Seed & EIS Hour every Monday evening, the aim is to apply these principles to make it a manageable onehour-a-week commitment, to building a highly diversified SEIS portfolio, with nil fees to erode net returns. Having watched and evaluated two or three entrepreneurs pitch their businesses, you’re invited to express interest online.

But – unlike the total investment slider-bar beloved of crowdfunding platforms to whip the herd into a stampede - these expressions of interest are not divulged until/unless the moment when their cumulative total reaches the pitch target. At that point, each member of the audience who expressed interest learns that enough of their peers formed the same view and therefore the pitch is likely to move to the next stage. Or, not.

Making SEIS easier We think the outcome offers an improvement on current prevailing investor behaviour which falls into three camps, typically:

• Investment into SEIS funds, which are characterised by significant fees and concentration of risk/limitation of reward through small portfolio size. Consider that even if the selection is basically sound, luck also plays a part in their eventual performance. So when you’re looking at the six or seven expensively-selected companies in your fund, ask yourself: do you feel lucky today, punk?

• Direct investment through equity crowdfunding platforms, where deal quality can be poor, valuations can be high, and the average SEIS portfolio is less than three holdings • Sink your £100,000 SEIS allowance into your brother-in-law’s business.

We think that the main constraint on SEIS investing generally (and the main driver of SEIS investing through funds) is that until now, it has simply been too hard for individual investors to find viable opportunities with only a modest time commitment.

And for the future, seed investing through equity crowdfunding platforms will depend totally upon efficiently connecting the best opportunities with investors who understand the benefits of building a diverse portfolio, rather than placing ad-hoc bets.

How to participate Series 4 of The Seed & EIS Hour will resume in January 2017 together with an additional format, The Series A Hour with Match Capital. We regularly host key figures from the industry, for example UK Business Angels Association’s Jenny Tooth OBE, and EISA’s outgoing Director General Sarah Wadham, as well as exceptional company founders.

Your client wants SEIS suggestions. You can’t advise. Now what?

We operate as an Angel Association, which is free of charge for members. Of course, there is the standard FCA registration requirement in order to access the free content (via any device). So while you can’t give advice to clients on particular deals, you can nevertheless provide guidance for where to look. Once registered, you’ll receive a weekly email with notes on the up-coming presentations for the week so that you can login, watch, ask questions – and move forward armed with insight and information.

November 2016 · www.eismagazine.com

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EIS Open

Close

Now

Evergreen

Amount to be Raised: N/A Minimum Investment: £25,000

Seneca EIS Portfolio Service The Seneca EIS Portfolio Service is an evergreen discretionary management service that offers investors the opportunity to build a portfolio of equity investments in UK based SMEs, which are seeking an injection of capital to fund their next phase of growth.

The Service gives investors a portfolio of 4-6 investments per year diversified by sector. It targets investment returns of £1.60 to £1.80 per £1 invested (excluding tax reliefs). The EIS Service totals over £34m and has completed 45 investment rounds across 28 companies. 13 companies in the portfolio service are already AIM listed providing liquidity, market pricing and exit visibility for investors.

The Portfolio Manager, Seneca Partners, is part of the wider Seneca business, which has c. £450m invested assets and over £4bn debt under advice.

T. 020 7071 3926 E. seneca@lgbrtax.com www.lgbrcapital.com

EIS Open

Close

January 2014

Open-ended

Amount to be Raised: Unlimited

PUMA INVESTMENTS - PUMA EIS The Puma EIS Service employs a proven investment strategy to offer exposure to asset-backed investments across a range of sectors. Puma EIS seeks to support the growth of UK SMEs whilst focussing on capital preservation. It seeks to deliver appropriate risk-adjusted returns together with the full range of EIS tax reliefs on 100% of funds subscribed to the Service (after deduction of Financial Adviser charges) depending on individual circumstances.

Successful deployment: Puma EIS has raised £40m+ to date. All funds raised have been successfully deployed in EIS Qualifying companies within the tax year of subscription to the service.

OPEN OFFERS Highlighting some of the key offerings currently available to IFAs

The knowledge, experience and pedigree of Seneca’s investment team, combined with their individual track records of successful investing in the SME sector, is complimented by an extensive deal flow network in the UK’s SME heartlands of northern England and the West Midlands.

Closing dates: Puma EIS is an evergreen service but operates quarterly fund closes usually in April (just prior to the end of the tax year), July, October and January. Funds are allotted as soon as possible following these closes.

T. 020 7408 4070 E. info@pumainvestments.co.uk www.pumainvestments.co.uk

EIS Open

01/10/16

Close

04/04/17

Amount to be Raised: £500,000 Minimum Investment: £10,000

Realisations: It is envisaged that investments in Qualifying Companies will be realised within 3 to 5 years.

Investment Size: Minimum subscription is £15,000 with no upper limit.

VN Aerotoxic Detection Solutions Ltd - An EIS Raise with HMRC Advanced Assurance VN Aerotoxic Detection Solutions Ltd. (VN-ADS) is currently raising £500K via an HMRC Advanced Assured EIS. The money will fund the further development of a handheld aircraft cabin sensor technology that can detect Tricresyl-phosphate, (TCP, a poisonous organophosphate) onboard aircraft. This stage will design, manufacture, certify and support 100 prototype hand-held sensors for distribution and use by Cabin and Aircrew throughout the commercial aviation industry. The monetisation of this technology will be achieved through the sale of handheld sensors, and the licencing of an onboard detection solutions to aircraft manufacturers.

The cabin air of all commercial aircraft, except the recently introduced Boeing 787 is bled off the jet engines and is therefore susceptible to contamination from engine oil, some ingredients of which are known nuerotoxins, tricresyl phosphate being one.

T. 0207 096 1373 E.mgilmore@vn-cp.co.uk www.vn-cp.co.uk

The airline industry, including manufacturers and operators is under significant pressure as a result of increasing employee legal actions against them, and worldwide public enquiries into the deaths and illnesses being suffered by cabin and aircrew, following the discovery of the organophosphate TCP in aircraft cabins. To date, there is no real-time sensor or detection technology available, and airlines and operators are now losing or settling cases brought against them by their staff (for dangerous working conditions) outside the courts.

November 2016 · www.eismagazine.com

EIS

SEIS

VCT

SITR

IHT

BPR

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EIS Open

Close

01/08/2013

N/A

Amount to be Raised: Uncapped

Deepbridge - Technology Growth EIS The Deepbridge Technology Growth EIS represents an opportunity for investors to participate in a portfolio of actively-managed growth-stage technology companies, taking advantage of the potential tax benefits available under the Enterprise Investment Scheme. The Deepbridge Technology Growth EIS is a diversified portfolio of actively managed high-growth companies seeking commercialisation funding. The Deepbridge EIS invests in companies that have a proven technology, clear intellectual property and are operating in a high growth/high value market sector.

Focused on investing in high growth companies that are seeking to commercialise and expand, specifically in three sectors: • Energy & resource innovation; • Medical technology • IT-based technology

T. 01244 746000 www.deepbridgecapital.com

The target return for the Deepbridge Technology Growth EIS 22.9% p.a. over a minimum of three years; representing mid-case capital growth of 160p returned for every 100p invested. To ensure maximum tax efficiency for the investor, the Deepbridge EIS is entirely investor-fee free at point of investment.

EIS Open

Evergreen

SEIS Close

Evergreen

Amount to be Raised: N/A Minimum Investment: £5,000

Close

21/09/2016

31/12/2016

Amount to be Raised: £560,000 Minimum Investment: £10,000

EIS Investment in forthcoming Martin Freeman & Maxine Peake Film ‘Funny Cow’ has already been acquired by Entertainment One, the distributor behind ‘12 Years a Slave’, ‘The BFG’ and ‘Spotlight’ guaranteeing wide distribution of this major UK comedy drama. As well as Freeman and Peake cast includes Stephen Graham (Boardwalk Empire), Vic Reeves and more.

EIS investors can expect a 20% premium on their investment return a high position in the recoupment ‘waterfall’ of incoming revenue and exclusive benefits such as set visits, red carpet premiere invites and screening.

Gizmo Films, a highly experienced film finance company led by private equity & EIS specialist Peter Dunphy, has selected ‘Funny Cow’ on behalf of its investors due to the strong return schedule, top name cast and guaranteed distribution.

Production takes place between November 2016 and May 2017.

Suitable for self certified sophisticated and HNW investors only. Gizmo Films works with HMRC approved SEIS and EIS firms only. Financial partner Brown McLeod & Legal Partner Lee & Thompson. Banking partner Barclays Bank.

T. 020 7233 7602 E. info@gizmofilms.com www.gizmofilms.com/funnycow

EIS Open

December 2015

Close

At Capacity

Amount to be Raised: £20m

TIME:EIS Shipping TIME:EIS Shipping invests in dry bulk shipping, offering investors an asset backed opportunity in a global industry that has been established for thousands of years. Shipping is a sector recently identified by the Government as vital to the UK economy and one it is keen to support.

• We offer a simplified asset transfer process which allows advisers to place all of their clients’ tax efficient investments onto the platform.

• We provide intuitive online reporting tools, allowing advisers to monitor, analyse, and provide consolidated performance updates and quarterly reports to their clients.

• All investable companies go through one of 3 defined due diligence tiers, giving added peace-of-mind to the adviser.

• A single, secure online environment for all clients to review and build their tax efficient investment portfolios.

T. 020 7071 3945 E. enquiries@growthinvest.com www.growthinvest.com

EIS

SEIS

Open

Close

August 2012

Evergreen

Amount to be Raised: N/A

Key information for TIME:EIS Shipping • Asset backed, with investment realisation expected within 4-5 years

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EIS Magazine · November 2016

• Highly rated by independent researchers • Minimum investment £10,000

Oxford Technology EIS/SEIS Fund Oxford Technology has specialised in investing in high risk/high potential return technology start-ups since 1983. OT(S)EIS is fund no 14, and remains open for investment at any time. Investors end up with a portfolio of SEIS and EIS investments after 36 months.

To date we have made 24 investments and have had two failures (there will surely be more in due course). But the losses on the failures, after tax reliefs are only £12,300 and £21,000. So far we have had three successes (there will surely be more) and the net gains on these (only on paper so far) are >£3.2m after tax reliefs.

TIME:EIS Shipping has an initial capacity of £20 million, after having raised its full £5 million for its first tranche in the 2015/16 tax year, tranche 2 is now open for investment in the 2016/17 tax year. Alongside our specialist EIS team, support is provided by third parties with substantial experience in shipping.

T. 020 7391 4747 E. questions@time-investments.com www.time-investments.com

We’ve placed the adviser at the heart of everything we do, making it straightforward for advisers to improve the service they offer to their clients in the tax efficient investment arena. Please visit us at growthinvest.com for more details about our current open investment opportunities.

The SEIS scheme transforms the economics of investing in start-ups. The losses on those which fail are greatly reduced. The gains on those that succeed are tax free. They key to success is to take real risk and to make large gains on the successes.

Targeting a base case return of £1.27 for each net 70p invested, this noncontentious business model makes TIME:EIS Shipping an excellent fit within the EIS regulations – which is why advance assurance from HMRC has already been granted.

• Each vessel purchased without use of debt, thereby reducing the overall risk profile

GrowthInvest is a unique, independent platform which provides access to tax efficient investments to a growing network of UK financial advisers, wealth managers and investors. Originally founded by financial advisers in 2012 as the Seed EIS Platform, we rebranded as GrowthInvest in October 2016 to better reflect the wider range of products and services available: • We permit investment into a range of single company offers, as well as Managed EIS Portfolio Services and funds, giving clients a number of different investment options.

EIS Open

GrowthInvest - The Tax Efficient Platform for Advisers

T. 01865 784466 E. lucius@oxfordtechnology.com www.oxfordtechnology.com

Our quarterly report, which gives a page of information on each of the investments may be downloaded from www.oxfordtechnology.com. Investors email to say how much they like this. Min investment £15,000. No initial fee. 3% introductory fee to IFAs. Man. fee 2% pa for 3 years, then 1.5% pa accrued. 0.35% pa custodian fee. 20% performance fee after hurdle achieved. Full details in IM, also downloadable.

November 2016 · www.eismagazine.com

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EIS

SEIS

Open

Close

October 2016

N/A

Amount to be Raised: £5m

T. 020 7873 2122 E. seis@jensonsolutions.com www.jensonfundingpartners.com

EIS Open

14/11/2016

SEIS Close

04/04/2017

Amount to be Raised: £10m Minimum Investment: £25,000

Jenson Funding Partners - SEIS & EIS Fund 4 We are pleased to follow-up our first three funds with a combined SEIS and EIS Fund (‘Fund 4’). Our offering allows investors to choose whether they want to invest solely via SEIS or EIS or to split their funds across SEIS and EIS investments.

The Fund aims to target exciting new innovative and disruptive technologies to be nurtured alongside existing investment opportunities that require follow-on investment to fully exploit commercialization of a proven business model. At Jenson we aim to offer these businesses far more than just funding. To date, we have actively advised entrepreneurs to re-evaluate business models, reduced projected costs and introduced potential executives, partners, customers and suppliers as part of the value added service we provide. Each investment is allocated an experienced Jenson finance director to the management team on a part-time basis to enhance returns, which is a key differentiation between ourselves and other SEIS and EIS providers. The combined SEIS and EIS structure is designed to provide increased diversification as a portfolio investment. We aim to maximise and balance between capital growth, portfolio risk and time horizon, whilst enhancing the tax advantages available.

SEIS Open

Close

Now

Multiple

Amount to be Raised: £2.1m Minimum Investment: £10,000

Mercia Growth Fund 7 Mercia is a leading national investment group focused on building technology businesses from the UK regions. From seed through to exit, Mercia is in the compelling position of using a full range of capital - the ‘Complete Capital Solution’ - to build valuable businesses with truly global potential.

• Continued expert oversight from an investor director appointed to each startup portfolio company

• Software & the Internet

Mercia has 18 university partnerships across the Midlands, the North of England and Scotland, providing an enviable source of deal flow to its investment team.

T. 0330 223 1430 E. paul.mattick@merciatech.co.uk www.merciafund.co.uk

EIS

SEIS

Open

Close

06/04/15

Evergreen

Amount to be Raised: £10m Minimum Investment: £25,000

Mercia Growth Fund 7 is a tax-efficient SEIS/EIS hybrid fund that builds and supports largely pre-revenue businesses as part of Mercia’s Complete Capital Solution. As well as fees which are lower than the industry average, investors in Mercia’s funds also benefit from access to Mercia’s award-winning Investor Centre, which provides performance information and, in some cases, the option to sell shares.

T. 0207 428 6006 E. info@worthcapital.uk www.worthcapital.uk

IHT Open

June 2013

Close

Open-ended

Amount to be Raised: Unlimited

Boundary Capital AngelPlus Fund

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EIS Magazine · November 2016

This experienced team have conceptualised, built, grown and realised technology businesses, led over 14 Venture Capital funds with over £200m in management and achieved 60 exits with fund multiples ranging from 1.4x to 3.0x

• Multiple SEIS investments to create a tax efficient and diversified portfolio for qualifying investors

PUMA INVESTMENTS - PUMA HERITAGE Puma Heritage’s core focus is on secured lending. Its primary objectives are to preserve capital and mitigate risk.

Strategy: Conservative trading strategy focused on secured lending.

Flexibility: Choice of income or growth shares and ability to switch between them.

Boundary Capital is a venture capital firm investing in UK based early stage technology and life science companies. It was established in 2009 by successful technology entrepreneurs and investors. The fund objective is lead and/or colead selective, early stage investments using a unique ‘Venturer’ approach which ensures all investments are nurtured actively. The fund only invests alongside ‘Venturers’ who are experienced entrepreneurs and executives (there are 300+ Venturers from a variety of technical fields and industries who are signed up to support Boundary Capital’s unique investment approach). These Venturers invest their own money and take an active board seat alongside Boundary Capital and its investment director in the investee company. This helps to promote success to de-risk them whilst adding value to the founders too. Further, there are no fees to pay by investors so 100% of their funds are invested.

Experienced Adviser: Puma Heritage has appointed Puma Investments as its trading adviser.

Aligned Interests: The interests of Puma Investments (the trading adviser) and Shareholders are entirely aligned: Puma Investments will not receive any performance fees and its annual advisory fees are only paid in full if the minimum target annual return is paid in full.

Liquidity: Twice yearly opportunity to access capital (subject to terms set out in the Prospectus).

Subscription Amount: Minimum subscription of £25,000 with no maximum.

Inheritance Tax: It is intended that a subscription for shares in Puma Heritage will benefit from relief from Inheritance Tax provided the shares have been held for at least 2 years prior to and at the point of death and depending on individual circumstances.

The investment portfolios are co-managed by 5 Partners - Dan Somers, Dr Richard Leaver, Dr David Gee, Dr Adrian Parton and Grant Hawthorne. Ernie Richardson is strategic advisor working closely with the Partners.

T. 020 7060 3773 E. info@boundarycapital.com www.boundarycapital.com

The Start-Up Series is a competition to search for great new consumer businesses - those creating products & services we buy and the ways that we buy them. The Series is promoted in partnership with startups.co.uk, the ‘goto’ place for advice for new businesses, with over 400,000 unique visitors each month. Worth Capital’s distillation and due diligence process aims to select 12 businesses over 12 months, to each qualify for up to £150,000 in SEIS funding, with a further £300,000 of the fund reserved for discretionary investments.

Amersham Investment Management have created the Start-Up Series SEIS Fund One to allow investors to invest in winning businesses.

• Sophisticated distillation methods to search among these for the brightest entrepreneurs with the smartest ideas

• Digital & Digital Entertainment

• Electronics, Materials & Manufacturing / Engineering.

Invest in a portfolio of SEIS start-ups, selected through a series of competitions searching for the brightest entrepreneurs with the smartest ideas.

• The Start-Up Series competition reach is designed to produce a high volume of businesses to consider

Mercia targets sectors in which its investment team holds deep expertise. It offers not only funding, but advice and support, to make sure that a business achieves its full potential. Its core sectors include:

• Life Sciences & Bio-sciences and

Start-Up Series SEIS Fund One

T. 020 7408 4070 E. info@pumainvestments.co.uk www.pumainvestments.co.uk

This is an advertisement only. A copy of the Prospectus is available on Puma Investments’ website.

Investors should not subscribe for shares in Puma Heritage Plc except on the basis of information in the Prospectus.

November 2016 · www.eismagazine.com

33

IHT Open

October 2014

Close

Open-ended

Amount to be Raised: Unlimited

PUMA INVESTMENTS - PUMA AIM INHERITANCE TAX SERVICE Puma AIM Inheritance Tax Service is a discretionary service that seeks to mitigate Inheritance Tax by investing in a carefully selected portfolio of AIM shares. The Puma AIM Inheritance Tax Service is also available in ISAs. Portfolio Service: A discretionary portfolio service that seeks to deliver long term growth focusing on quality companies listed on AIM. Inheritance Tax: It is intended that investors will benefit from relief from Inheritance Tax provided investments are held for at least 2 years prior to and at the point of death and depending on individual circumstances.

Minimum subscription of £15,000 with no maximum.

T. 020 7408 4070 E. info@pumainvestments.co.uk www.pumainvestments.co.uk

BPR Open

Close

Evergreen

Evergreen

Amount to be Raised: Unlimited

Available in ISAs: Whilst ISAs can be extremely tax efficient during the holder’s lifetime, upon death ISA balances may be subject to a 40% IHT liability. Investing in a portfolio of qualifying AIM stocks gives holders the opportunity to mitigate Inheritance Tax while still retaining the benefits of an ISA. ISA Transfers can be accepted from existing providers as well as new investments.

TIME:Advance TIME:Advance is a discretionary management service that allows investors to access Business Property Relief (BPR) to mitigate their Inheritance Tax (IHT) liabilities. The service offers 100% IHT relief in just two years, alongside a targeted return of 3.5% per annum. Importantly clients retain access and control, so have the option to withdraw a lump sum or set up regular withdrawals in the form of an income.

The service focuses on capital preservation by investing in asset backed businesses with no debt which qualify for BPR. These businesses include secured lending, renewable energy, biomass and self-storage. The product is managed by an expert team, with a proven 20 year track record of 100% success in achieving BPR for investors.

T. 020 7391 4747 E. questions@time-investments.com www.time-investments.com

BPR Open

Evergreen

Close

Evergreen

Amount to be Raised: Unlimited

TIME: CTC (Corporate Trading Companies) TIME:CTC is a bespoke Inheritance Tax (IHT) solution for corporate investors, which boasts an impressive 20 year track record of delivering IHT relief for investors. TIME:CTC is aimed at business owners who have built up surplus cash in their business and could potentially lose Business Property Relief (BPR).

The focus of TIME:CTC is on capital preservation by investing in asset backed businesses which qualify for BPR. These businesses include secured lending, renewable energy, biomass and self-storage. Our strategy allows business owners to maintain control of their assets, avoiding the need for trusts or gifting to obtain relief.

T. 020 7391 4747 E. questions@time-investments.com www.time-investments.com

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EIS Magazine · November 2016

Targeting a return of 3.5% and potentially immediate reinstatement of BPR qualifying assets. To date more than 500 of our clients have already achieved BPR on their investments, a 100% success rate.

November 2016 · www.eismagazine.com

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