The Fundamentals #7 – 10 reasons to invest with Fundamental Asset Management

In the seventh of our series – The Fundamentals – about going back to the basics of investing in AIM shares for Inheritance Tax (IHT) planning purposes, we look at  reasons to invest with Fundamental Asset Management.

If you or your client already invests with us, we hope you don’t mind us reminding you what makes us different.

10 Reasons to invest with Fundamental

1. Same portfolio managers since founding in 2004.

2. Our in-depth research seeks out the best investment opportunities on AIM.

3. Experience and expertise, gained through several stock market cycles, along with our outstanding customer service, makes Fundamental Asset Management one of the most successful AIM managers for tax efficient investing in the UK.

4. Personal service with resources such as market insights and direct contact with our portfolio managers.

5. “Core and Satellite” investing approach provides exposure to larger AIM stocks as well as smaller companies with higher growth potential.

6. Excellent value for our clients; a fully tailored portfolio service.

7. Client retains access – assets remain in client’s own name – so no loss of control and client has freedom to redeem part or all if needed.

8. Significantly outperformed the AIM market since inception in 2004, but monthly returns have exhibited less volatility.

9. Support to estates after a client has passed away. At a difficult time, we provide the information HMRC requires at no additional charge.

10. One of the most competitively priced products in the market providing excellent value.

For more information about reducing Inheritance Tax by using Business Relief (also know as Business Property Relief) click here.

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

The Fundamentals Series

Our Educational Webinars also provide plenty of further information.

Fundamental Asset Management


AIM ‘For Sale’ – private equity spots a bargain

The recent stock market sell-off has resulted in several private equity groups taking a close interest in AIM quoted companies. We aren’t surprised given the quality on offer from AIM’s proven performers, nearly all of which are now trading at significantly lower valuations than they were a few months ago.

At the end of April, Baring Private Equity Asia (‘BPEA’), confirmed that it was in the preliminary stages of considering a possible offer for RWS Holdings, one of AIM’s largest companies, valued at over £1.5 billion.

RWS has not received any formal approach from BPEA, which may never materialise, but we aren’t surprised they have made a move given RWS’ declining share price over recent months and the highly cash generative nature of this world-leading provider of technology-enabled language, content and intellectual property services.

BPEA is required, by not later than the close of business 19 May 2022, to either, announce a firm intention to make an offer, or announce that it does not intend to make an offer. The deadline may be extended with the consent of the Panel on Takeovers and Mergers.

Matters have progressed even further with Ideagen, a provider of compliance software for regulated industries. In the middle of April, private equity group Cinven confirmed that it was in the early stages of considering a possible offer for the Company. While Cinven subsequently pulled out, two other private equity groups, Astorg and Hg, then stepped in.

Hg has now offered to pay up to 350 pence per share, a premium of about 52% to Ideagen’s closing price on April 11, valuing Ideagen at just over £1 billion..

Shares in Ideagen currently site at 352 pence, above Hg’s offer price, suggesting that investors are expecting a counter bid from French rival suitor Astorg.

UK-based Ideagen is a leader in the +$30 billion regulatory and compliance software market, serving highly regulated industries such as life sciences, healthcare, banking and finance and insurance. More than 8,000 customers use Ideagen’s software, including 9 of the top 10 UK accounting firms, all of the top aerospace and defence companies and 75% of leading pharmaceutical firms.

Ideagen’s board plans to unanimously recommend the Hg deal to shareholders, considering that it “represents value for shareholders”.

Since moving to AIM from Plus Markets in July 2012, when its market capitalisation was only £11m, Ideagen has been a strong performer on AIM, acquiring a large number of businesses along the way. Given the recent de-rating of technology stocks, the acquisition multiple of 48x adjusted forecast earnings for the year to April 2022 looks quite full to us, so we aren’t surprised the board are enthusiastic supporters of the deal.

Not only will we be sad to see another high-quality AIM company leave the junior market, but, if share prices of AIM companies continue to languish, we fear that cash-rich private equity buyers will acquire several other AIM companies by the time the year is out.

AIM’s well-established technology related companies, notably in the software arena, look particularly vulnerable to approaches, given their proven business models, cash generative attributes and largely debt-free balance sheets.

To find out more about the benefits of investing in AIM, please speak to our Business Development Manager Jonathan Bramall via email [email protected]  or phone 01923 713 894

Our recent Webinar covered many of the key questions clients ask when considering investing in AIM shares for Inheritance Tax Planning purposes. You can watch a recorded version of the webinar from the link here.

This video presentation here also provides a brief introduction to the Fundamental AIM IHT portfolio service


Fundamental Asset Management



The Fundamentals #6 – How long do you need to hold a qualifying stock for it to receive IHT relief?

In the sixth of our series – The Fundamentals – about going back to the basics of investing in AIM shares for Inheritance Tax (IHT) planning purposes, we look at How long do you need to hold a qualifying stock for it to receive IHT relief?

We recently ran a webinar for financial advisers where we answered questions on How to use AIM for Inheritance Tax Planning? We received a number of questions regarding the length of time shares must be held to benefit from IHT relief. With the risk warning that we are not tax advisers as well as that tax benefits depend on circumstances and tax rules can change, we have put our understanding of the rules below.

What is the length of time a Business Relief (BR) qualifying stock must be held so a client’s estate does not need to pay Inheritance Tax?

  • A share (and any replacements) must have been held for at least a total of 2 years and still be held on death.
  • The company must still qualify for Business Relief at the time of the investor’s death.

Does the overall AIM portfolio need to be held for 2 years to claim BR or is it on a share by share basis?

  • It is on a share by share basis.

If a qualifying stock is sold and new qualifying stocks are purchased, does that reset the clock?

  • As long as the whole of the money from the sale of the stock is reinvested, the calendar does not reset.

Does HMRC publish a list of qualifying AIM stocks which, if held for 2 years, would qualify for IHT relief?

  • No, HMRC doesn’t produce a list but this is where using experts such as Fundamental Asset Management comes into play. Not only do we select stocks based on the qualifying criteria but we also keep them under review in case their Business Relief qualifying status changes. It is also worth noting that as well as the potential of saving 40% on IHT, our AIM for IHT portfolio service has seen historical growth that has outstripped other indices and competitors over many years.

For more information about reducing Inheritance Tax by using Business Relief click here.

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

The Fundamentals Series

Our Educational Webinars also provide plenty of further information.

Fundamental Asset Management


The Fundamentals #5 – How to use AIM to stop HMRC taking money from your family?

In the fifth of our series – The Fundamentals – about going back to the basics of investing in AIM shares for Inheritance Tax (IHT) planning purposes, we look at: How to use AIM to stop HMRC taking money from your family.

Figures released yesterday by HMRC showed they took £6.1 billion in Inheritance Tax for March – up by £0.7 billion on last year. How can clients use AIM  to reduce the amount their family pays after they pass away?

One way is for a client to invest in certain AIM shares that qualify for Business Relief for 2 years and provided they are still held at death, the estate will not pay Inheritance Tax on them.

What is Business Relief?

Business Property Relief or BPR (now known as Business Relief) was first introduced in 1976 to allow family businesses to be passed down through generations free of IHT. Its scope subsequently widened and since 1996 it was made available for a range of assets, including limited companies. This means if you buy and hold shares in such companies you could potentially pass on those shares IHT free provided that:

  • the shares are held for at least two years and are still held on death
  • the company still qualifies for BPR at the time of the investor’s death

You could buy as few or as many shares as you wish. There is no upper limit or allowance. Provided the above conditions are met, the whole value of the investment – be it £10,000 or £10 million – should attract 100% IHT relief.

Please note, tax benefits depend on circumstances and tax rules can change.

Inheritance Tax mitigation

A Fundamental AIM Inheritance Tax portfolio achieves 100% mitigation from Inheritance Tax after only two years. Not seven years as is the case through a gifting or trust approach.

Upcoming webinar: How to use AIM for Inheritance Tax Planning? Your Questions Answered

Join Fundamental Asset Management’s Co-Founders Chris Boxall & Stephen Drabwell on Wednesday 4th May at 3pm 2022 as they answer your questions on using AIM for Inheritance Tax Planning. To register for the webinar click here.

What Would You Like To Know?

Now is the time to ask us and we will endeavour to cover it in the webinar.
Send your questions to: [email protected]

The Fundamentals Series

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

Our Educational Webinars also provide plenty of further information.

Fundamental Asset Management


The Fundamentals #4 – What is the Fundamental AIM Inheritance Tax Portfolio?

In the fourth of our series – The Fundamentals – about going back to the basics of investing in AIM shares for Inheritance Tax (IHT) planning purposes, we look at: the Fundamental AIM Inheritance Tax ISA Portfolio.

Inheritance Tax planning is not only for those with high net worth. It is a tax which is paid in record numbers (HMRC figures released March 2022) by thousands of people in the UK every year. But it is avoidable with a good Inheritance Tax plan. That is why we would recommend you speak to a financial adviser before making any investment decisions.

The Fundamental AIM Inheritance Tax Portfolio has the objective of obtaining 100% relief from Inheritance Tax, as well as the potential for capital appreciation, by investing into qualifying AIM quoted companies. The Fundamental AIM Inheritance Tax Portfolio is an effective, proven and non-contentious tax planning method which avoids the costs, administration and loss of control associated with forming a trust or gifting.

Growth potential

Holding a Fundamental AIM Inheritance Tax Portfolio means you will benefit from the growth opportunity AIM presents as one of the most successful growth markets in the world.

Inheritance Tax mitigation

A Fundamental AIM Inheritance Tax portfolio achieves 100% mitigation from Inheritance Tax after only two years. Not seven years as is the case through a gifting or trust approach.

Retain access to your assets

Holders of the portfolio retain assets in their own name, which means you will not lose control of your assets and have the freedom to redeem some, or all, of your holdings at any time.

ISA benefits

A Fundamental AIM Inheritance Tax Portfolio can be wrapped in an ISA which means you benefit further from no Income or Capital Gains Tax on growth. An ISA can also be left to a surviving spouse in its entirety tax-free through Additional Permitted Subscription. We explain more about the AIM ISA here.

How do I transfer my existing ISA to Fundamental?

If you are looking to transfer your existing ISA to a Fundamental AIM ISA then all you have to do is complete our application and transfer forms and email them to: [email protected], alternatively please call 01923 713 894 .

Please note, if you withdraw your investments from your ISA instead of transferring them, you will lose your ISA benefits and we will not be able to include them into a new Fundamental AIM ISA if that sum is higher than your current year allowance. Transfers can be made in stock and/or funds (with some exceptions) and cash. To retain previous years ISA allowance, please complete our ISA transfer form. Generally, the ISA transfer process can take anything up to six weeks for transfer proceeds to be received by Fundamental from your previous provider.

Looking for a quote?

Email details to us at [email protected] and we will be happy to pull together a personalised illustration for you.

The Fundamentals Series

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

Our Educational Webinars also provide plenty of further information.

Fundamental Asset Management


The Fundamentals #2: How to use ISAs for Inheritance Tax (IHT) planning?


In the second of our new series about going back to the basics of investing in AIM shares for IHT planning purposes, we look at: How to use an AIM ISA to reduce Inheritance Tax.

Are ISAs Inheritance Tax free?

ISAs per se are not Inheritance Tax free, but they can become so by using a service such as the Fundamental Asset Management AIM IHT ISA Portfolio Service.

What is an AIM ISA or AIM IHT ISA portfolio?

An AIM ISA portfolio or AIM IHT ISA portfolio, as the name suggests, is a portfolio of AIM shares, listed on AIM, the junior market of the London Stock Exchange. AIM shares which meet the Business Property Relief rules should benefit from IHT relief and can be held in an ISA. We explain more about Business Property Relief here.

How does it work?

Fundamental Asset Management purchases and manages a portfolio of eligible AIM ISA shares on a client’s behalf – we are experts in assessing Business Property relief eligibility. The portfolio of shares, including capital growth, can be passed on free of IHT after two years, provided the shares are still held on death and still eligible for relief.

Do all AIM shares benefit from IHT relief?

No. At the end of 2021 there were 852 companies on AIM. We estimate that approximately 600 qualify for Inheritance Tax relief and, of those, approximately 300 meet our investing criteria.

When is the ISA deadline for 2021/22?

The ISA deadline for 2021/22 is April 5th, the tax year end. However, the latest date for receipt of ISA applications is 31st March. Please contact us if you would like to discuss opening an AIM IHT ISA.

Can an ISA from a previous year become an AIM IHT ISA?

Yes. You can transfer existing ISAs to Fundamental Asset Management:

  • Protecting your ISA wrapper benefits
  • Gaining Inheritance Tax relief after 2 years
  • Taking advantage of the potential growth AIM offers

For more information see our website page AIM ISA Explained

Is now a good time to invest?

As is normally the case when stock markets face uncertainty, the share prices of smaller companies, and particularly those on AIM, have sold off significantly in the first quarter of 2022.

We believe in focusing on the fundamentals of a company, and recent results and updates from many AIM companies we follow have been extremely positive. The recent sell-off therefore presents an excellent opportunity to consider investing in a host of exciting, growing AIM companies, at far more modest valuations than a few months ago.

  • See our previous blogs for more information. AIM market sell-off – what we are doing.
  • Listen here to a podcast featuring Chris Boxall, Co-founder of Fundamental Asset Management discusses the latest market sell-off and considers what investors should be doing.

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

Fundamental Asset Management


Russia invades Ukraine and stocks tumble – what does it mean for the portfolios?

Attributed to Nathan Mayer Rothschild during the Napoleonic wars, it’s pertinent to consider the above statement at the current time as Russia invades Ukraine and stock markets plunge – at the time of writing the UK stock market is down 3%.

But how have wars really affected stock markets?

Research from LPL Financial indicates that stocks have largely shrugged off past geopolitical conflicts. “As serious as this escalation is, previous experiences have indicated it may be unlikely to have a material impact on U.S. economic fundamentals or corporate profits,” said LPL Financial Chief Investment Strategist John Lynch.

The table below, courtesy of LPL Financial, summarises the stock market reaction to major geopolitical events going back to the Pearl Harbor Attack of 1941.

Iraq’s Invasion of Kuwait in 1990 offers an interesting guide and resulted in a 16.9% total drawdown in the S&P 500 Index over the course of 71 days; it subsequently took 189 days to recover.

However, history tells us that it’s the periods of uncertainty, such as those experienced over recent weeks, when stocks suffer the most.

In 2015, researchers at the Swiss Finance Institute looked at U.S. military conflicts after World War II and found that in cases when there is a pre-war phase, an increase in the war likelihood tends to decrease stock prices, but the ultimate outbreak of a war increases them. However, in cases when a war starts as a surprise, the outbreak of a war decreases stock prices. They called this phenomenon “the war puzzle” and said there is no clear explanation why stocks increase significantly once war breaks out after a prelude.

Similarly, Mark Armbruster, the president of Armbruster Capital Management, studied the period from 1926 through July 2013 and found that stock market volatility was actually lower during periods of war. “Intuitively, one would expect the uncertainty of the geopolitical environment to spill over into the stock market. However, that has not been the case, except during the Gulf War when volatility was roughly in line with the historical average,” he said.

“Part of the reason for the calm may lie in the changing structure of global oil markets and how the U.S. economy has become less vulnerable to energy price swings,” said JPMorgan Funds chief global strategist David Kelly in a note. “Part of the reason may be purely psychological. Today’s investors have seen the stock market recover from both 9/11 and the Great Financial Crisis, arguably the greatest geopolitical and economic shocks of our time. This makes it easier for investors to shrug off other events.”

A conflict with Russia can also cause volatile oil markets, as Russia is a key producer of crude oil and natural gas, with pipelines feeding many parts of Europe. If Russia were to close the taps, or have its oil infrastructure damaged, it could lead to higher energy prices – the oil price has now risen above $100 a barrel for first time since 2014. Interruptions to the ports around the Black and Baltic Seas could also create even bigger shipping headaches and lead to food inflation as grains and other staples remain stuck at sea.

What does this mean for your portfolio?

The uncertainty of recent weeks has already brought a sharp sell-off in share prices, even before today’s events. The S&P500 index, which all other markets generally follow, is already 12% down on the highs hit at the beginning of the year. The main UK stock market has fared somewhat better in the short term and is only 5% lower, although that should be considered in the context of it not going anywhere over the past 5 years, while the S&P500 has climbed 79%, even after recent falls.

As we would expect, smaller companies and notably growth companies on AIM, have fared worst of all, with the AIM Index down 23% from the highs hit at the beginning of September 2021 and 18% in the quarter to date, with the latter broadly in-line with our AIM portfolios.

Much of this fall is down to inflationary fears and the prospect of a rise in interest rates, with so-called ‘growth stocks’, impacted more than old-economy stocks and news of the invasion impacting things further.  As we have commented previously, valuations of some of the earlier-stage and more speculative companies of AIM have also looked somewhat overheated for a while and a pull-back was long overdue.

In the short-term, this has little or nothing to do with companies results or indeed their prospects, it’s simply a matter of general sentiment, which sees small sellers of less liquid smaller companies materially impact share prices, in the absence of buyers.

At times like this the best course of action, which we have followed steadfastly since our founding in 2004, is to sit patiently and wait for the opportunities to arise, as they surely will and, in some cases, already have.

We remain comfortable with our portfolio companies, which remain good businesses (whatever the stock market may currently imply) and set to deliver strong returns to shareholders over the coming years.

While the plunging stock market might be a concern, there are clearly far more meaningful consequences of war and our hearts go out to the people of Ukraine at this terrible time.

Fundamental Asset Management




Volatility brings Opportunity to AIM IHT planning investors

Equities in general continue to be weak and volatile as investors weighed mostly positive US earnings reports against the threat of rising interest rates.

Last week, the BoE’s monetary policy committee voted to increase the base interest rate by 25 basis points to 0.5%. This marked the first back-to-back rate hike since 2004 and came after data revealed UK inflation surged to a 30-year high in December amid rising energy costs and ongoing supply chain issues. The BoE also raised its inflation forecast to an April peak of 7.25%, which would be the highest since 1991.

What does this mean for AIM?

Global stock markets are led by the US, with the volatility experienced in larger growth companies felt to an even greater extent by smaller ones. Consequently, this has brought heightened volatility to AIM, London’s growth market, notwithstanding news and results, with the AIM index down around 11% for the year to date.

At the end of January 2022 there were 845 companies on AIM, with the total market value £134 billion. 

AIM is a market with many growth focussed and successful businesses at the higher end but, given its smaller company start-up nature, it is also a market with companies yet to come into their own and even others which are yet to make a profit. In 2021 AIM welcomed 70 newcomers coming from a broad range of sectors with market capitalisations extending up to £1 billion.

AIM is a stock pickers market which is clear from the consistently strong performance made by AIM portfolio managers in the space.

Over the 5 years to end December 2021 the AIM index had risen 41% while the main UK stock market was only 7.5% higher. This suggests that UK investors had a better chance of outperforming by focusing on companies on AIM, as opposed to the UK main market, and also ignores the added potential benefit from Inheritance Tax savings. It will be interesting to see how the next 5 years work out.

At the end of 2021 30 AIM companies were valued at more than £1 billion each.

Over recent weeks, results and updates from AIM companies within our AIM Inheritance Tax planning universe have, with a few rare exceptions, been overwhelmingly positive, although share price declines would suggest otherwise.

You can find out more about the benefits of investing in AIM for IHT planning purposes in our free report available from the link here.

Our AIM IHT portfolio companies are well-established, highly profitable and cash generative and have excellent growth prospects – our latest fact sheets, available from our Document Library here, provide examples of some of these.

While inflationary fears and interest rate rises are upper most in some commentator’s minds, our AIM portfolio stocks are well-placed to maintain their growth, whatever the economic climate, having already proven themselves through challenging economic conditions over the last couple of decades.

At times like these there is nowhere to hide and our investing policy, followed consistently since our inception in 2004, is to ‘wait for the storm to blow over’.

If you want to hear more about AIM and its Inheritance Tax planning benefits, please watch our recent webinar here where we consider what 2022 might have in store for AIM and whether the compelling tax reliefs might be at risk.

You can access the webinar from our Educational Webinars page here or by going to the Fundamental Asset Management Brighttalk channel here. You will need to register on the Brighttalk platform, but registration is free.


As is so often the case during periods of irrational stock market selling, good companies are thrown out with the bad. So, for those with excess cash on the sidelines, the current AIM sell-off could present a good opportunity to buy into some excellent AIM companies at far more modest valuations.

It is worth remembering that from the middle of February to the middle of March 2020, during the early stages of the pandemic, AIM fell 36%, only to finish the year as a whole 20% up on where it had started, eclipsing the UK main stock market which remained 12% down over the course of the year – AIM companies offer plenty of volatility but also plenty of opportunity, as 2020 illustrated!

If you would like to talk to our portfolio managers about their curent thoughts on AIM, please contact Jonathan Bramall on 01923 713894 or email [email protected]

Our other popular educational webinars include:

All you need to know about investing in AIM for Inheritance Tax (Aug 2020)


The Truth about Risk in AIM (Sept 2020)

Fundamental Asset Management


Fundamental Asset Management in The Telegraph

2021 is proving to be the first year since 2014 that Initial public Offerings (‘IPOs’) on London’s AIM market have exceeded cancellations, although our research, which was picked up by The Telegraph’s Questor column, indicates that it’s proved hard for IPO investors to make money investing in AIM’s new arrivals.

You can download the Telegraph article from the link here Fundamental in The Telegraph Dec 21 or, if you have a subscription, read the article online here.

By the end of November AIM had attracted a total 75 new issues in 2021, while over the same period only 51 companies cancelled their admission. That’s a welcome change for AIM, where, since 2014, delistings have significantly exceeded new issues. This has seen the number of companies on AIM decline from 1,104 at the end of December 2014 to 842 at the end of November 2021.

While there has been a material decline in the number of companies on AIM over the past decade, the quality of companies has improved considerably, particularly over recent years, which has driven a strong performance from AIM over this period, significantly outperforming the main UK stock market.

The average value of companies on AIM at the end of November was £172 million which compares to an average value of only £65 million at the end of 2014. 28 AIM companies were valued at more than £1 billion each, with Hutchmed China the largest at £4.4 billion.

Excluding transfers from the main London market and reverse takeovers, our research suggests there were 60 true IPOs. One of the largest of these was the aptly named Big Technologies (AIM:BIG), which listed in July but saw its shares soar in quick time, lifting its market capitalisation to just over £1 billion by the middle of September. While the shares have fallen back since, they are still up 40% since IPO, with the market capitalisation £807m. Big Technologies public markets experience to date is a lot better than many others.

The shares of only 30 of the new arrivals remain above their IPO price, although there have been some very big winners to encourage IPO investors and our research reveals there is distinct profile to the star performers.

The best performing IPO on AIM in the year to date is 4basebio UK Societas (AIM: 4BB), a specialist life sciences group operating in the field of gene therapies and DNA vaccines. 4basebio joined AIM in February via an introduction (where no new money was raised on IPO), at a share price of 118 pence and market capitalisation of only £14.5m. It hopes to become a market leader in the manufacture and supply of high purity, synthetic DNA for research, therapeutic and pharmacological use. The shares are currently up 408% since IPO, lifting its market value to £74m.

The next best performer in the year was also a new arrival in February. Cornish Metals Inc (AIM:CUSN), is a mineral exploration and development company with projects in Cornwall which had previously been listed on the TSX Venture Exchange in Canada. Its dual listing on AIM raised £8.2m of new money at 7 pence per share which is being used to conduct a drill programme at its United Downs copper-tin project in Cornwall. The project lies within a densely mined district which was the richest copper producing region in Cornwall (and the world) in the 18th and early 19th centuries, and at that time referred to as “the richest square mile on earth” – how times have changed! Shares in Cornish Metals are up over 240% since IPO.

Other top performers in the year to date are Bens Creek Group (AIM:BEN), which operates metallurgical coal mines in West Virginia and whose shares are up 220% since October and Belluscura (AIM:BELL), a medical device developer focused on lightweight and portable oxygen enrichment technology, whose shares have climbed 160%.

It’s noticeable that all the top performers are early-stage companies which are not yet revenue generating and come from either the resources or life sciences sectors.

We are generally reluctant investors at IPO and like to see small companies deliver on public markets before investing. Many companies list after having enjoyed a strong period of growth prior to listing which has often proved tough to sustain. We are also very wary of big insider selling at IPO, notably by founders, which we have seen on several occasion in 2021.

Victorian Plumbing Group (AIM:VIC), the online retailer of over 24,000 bathroom products joined AIM in June in a blaze of glory and a market capitalisation of a whopping £850m. Only £11.8m was raised by the company itself on IPO, with c£286m received by selling shareholders, principally founder and CEO Mark Radcliffe (£212m) and his brother Neil (£42m), who is Product Director. While Mark Radcliffe remains the largest shareholder with a 45% stake, that was a material sell down and the shares currently sit 60% below the IPO price.

At the time of writing, 6 more companies have joined AIM in December, with the shares of 3 currently above the IPO price.

For more information:
Jonathan Bramall
[email protected]
01923 713 894



Fundamental AIM IHT portfolio update

Since hitting a high at the beginning of September, when its valuation touched £150 billion, the AIM market has struggled to make any progress, with the latest discovery of a new Covid-19 variant also pushing stocks lower across the board.

Some of AIM’s larger and more richly valued companies have been particularly weak over recent months as investors have been tempted to lock in profits after a very strong bounce from the lows of 2020 and the realisation that the short term could still prove challenging. Indeed, having benefited from a relatively benign environment of government support and shareholder forgiveness over much of the pandemic, we have started to see a more normal reaction to profit warnings from investors, with some significant share price sell-offs. Even those reporting what appear to be excellent results (which thankfully applies to many of our portfolio holdings) have seen their shares slide, with investors demanding ever greater returns and growth from the richly valued.

We have been investing in AIM for Inheritance Tax planning purposes since 2004 and experienced numerous different market conditions over this period.

Stock markets occasionally need to take breather and AIM’s recent underperformance relative to the main UK stock market comes as no surprise to us following a period of exceptional outperformance in 2020 and the beginning of 2021.

At times like this, when share prices are tumbling, for no stock specific reason, it’s often tempting to start re-shuffling portfolios, manically trading in search of the next great potential opportunity. However, our experience over the past 17 years has suggested doing nothing is generally the best course of action.

We question the logic of selling out of a high-quality company with strong long-term growth prospects, to reinvest in a lesser business with more modest prospects, simply on marginal valuation grounds. Experience has shown that high-quality smaller companies are more highly valued for good reason and, unless there is a fundamental change in their long-term growth prospects, it’s worth sticking with them.

Nevertheless, we have sold out of one core holding in the period following a disappointing trading update and our reassessment of its long term potential.

Please have a look at some of our educational webinars, which can be found here and expand on our investing philosophy and the reality of investing in AIM for Inheritance Tax planning purposes, notably during turbulent stock markets.

Our webinar from August 2020 ‘All you need to know about investing in AIM for Inheritance tax’ covers the basics of our AIM IHT portfolios.

Of more relevance to the current market, our webinar from 30 September 2020 ‘The Truth about Risk in AIM’ clarifies how we manage risk.

If you would like to discuss our AIM IHT portfolios please call us on 01923 713890 or email [email protected]