AIM Report 2019

46 47 INDUSTRY DEBATE VIEWS FROM THOSE SELECTING AND MANAGING THE INVESTMENTS How have the last 12 months been for your business and what have been your main focuses? DA: It has been a busy period managing the Adapt AIM Portfolios, navigating industry changes including MiFID II, an evolving political landscape and Brexit uncertainty. While investor optimism has been knocked, the portfolios still received healthy inflows. The growth potential and business relief aspects of AIM ensure it remains attractive. CM: Over the last year we began to lay the groundwork of innovating the way we do business, by utilising the best of what service technology has to offer. Our core business of Investment Management has been working hard alongside companion offerings from Wealth Management, Pensions and Alternative Investments, utilising the innovative software developed by our in-house team, to provide clients with quality service. SD: We have continued to go from strength to strength, with our assets under management growing to over £3bn. We have continued to steadily increase our headcount to ensure that we can continue to provide the high levels of customer service that we have become known for. One of our focuses has been our recent rebrand, which helps to better position our business around our vision, which is to deliver the best alternative investment solutions to the market. From an AIM perspective, we have focused on adviser outreach and education. AIM has an important part to play but we recognise that the AIM market is inherently volatile, so it is essential that it is recommended for all the right reasons and not just the IHT saving. SB: It has been an interesting year to say the least! Our main focus has been on ensuring that the portfolios are well positioned to deliver strong risk- adjusted returns – with an emphasis on the risks. JG: Despite the political and economic headwinds, we are pleased with our continued success in AIM fundraising. Our focus on the larger companies in the market and our significant portfolio diversification have been key strengths for clients. We have also worked hard to make it easier for advisers by working with greater numbers ATTENDEES JONATHAN GAIN STELLAR ASSET MANAGEMENT STEPHEN DANIELS TIME INVESTMENTS CHRIS MURPHY WALKER CRIPS SAM BARTON CLOSE BROTHERS AM RICHARD POWER OCTOPUS INVESTMENTS DAN APPLEBY BLACKFINCH INVESTMENTS Market research / Industry debate Moderator: Paul Jarvis, Intelligent Partnership of platforms and other ways of accessing our portfolio. RP: Inflows into our range of AIM products have been strong. As ever, our focus has been on delivering performance in line with our mandate and maintaining high levels of service to investors and advisers. “The AIM market is inherently volatile, so it is essential that it is recommended for all the right reasons.” - STEPHEN DANIELS, TIME INVESTMENTS What have been the biggest concerns for you in the market over recent years? CM: At Walker Crips we do our best to view challenges not as concerns, but opportunities to grow. The recent deluge of industry regulation and speculation around Brexit have both posed significant challenges. We continue to motivate our people, limit costs, and nurture best intentions to enable our advancement. SD: The lack of strong, effective internal governance within AIM companies remains our largest area of concern. There are too many instances of financial irregularities occurring within the AIM companies and this is naturally affecting investor confidence in the market. Sell side liquidity on the smaller AIM names is also of concern, although less of an issue to long- term Buy and Hold investors such as ourselves. SB: Obviously, Brexit has been a major concern – with such varied outcomes and entrenched views on all sides, the only logical reaction has been to look for geographic diversification; thankfully AIM does offer this. We are worried that central banks’ accommodative monetary policy has driven pockets of overvaluation, particularly on AIM. As we saw in the fourth quarter of 2018, any threat of tightening has had a big impact on highly rated stocks. Finally, the press surrounding potential changes to IHT has been unhelpful for the market. JG: Our biggest concern is the over-dramatisation in the press of the perception of the AIM market. A company failing, or lacking rigorous oversight coupled with reporting on the small size companies can give the impression that the whole market is poor. This is patently not the case and its always the actions of the few that tarnish the reputation of the masses. RP: The ongoing political uncertainty has not gone unnoticed! But our objective remains the same, which is to support growth companies over the long term and look through short-term market volatility. DA: There was a rocky period during Q4 2018 where we saw a heavy sell-off across global markets. This coincided with central banks contemplating raising interest rates, making stocks less attractive from an investing standpoint. The heightened geopolitical risks that have dented market optimism also show no signs of fading. “The press surrounding potential changes to IHT has been unhelpful for the market.” - SAM BARTON, CLOSE BROTHERS ASSET MANAGEMENT How do you view the market’s prospects going forward? SD: AIM, due to the availability of Business Relief, will continue to play an important role in allowing growing businesses to access expansion capital at a reasonable cost. New names are listing on AIM, however the current pace of takeovers (Manx Telecom, Safecharge, Telford Homes) means that the list of mature AIM companies is starting to contract. RP: AIM does a tremendous job of providing capital to growth businesses in all market conditions, and we expect that to continue. After all, AIM has done this over various cycles already and there’s no reason to expect it won’t continue to do so.