AIM Report 2019

66 67 TIME INVESTMENTS TIME:AIM ABOUT THE PROVIDER TIME is an award-winning investment manager specialising in tax-efficient investment solutions. Our original IHT service holds a 23-year track record and was one of the first to utilise BR to offer IHT mitigation for investors. Over 4,000 investors have invested in our IHT services to date and we hold a 100% track record of successfully achieving BR. We have over £500m in BR AUM and, with a nationwide team of 30 planning experts, we are dedicated to supporting the adviser community and professional connections. Our mission is to create transparent investment opportunities that bring long lasting peace of mind to investors and their advisers by seeking defensive performance. To do this we have established a culture that revolves around our clients. Recent award wins: • Service Beyond the Call of Duty at the Moneyfacts Awards 2018; • Best BR Investment Manager at the Growth Investor Awards 2018; • Best IHT Portfolio Service at the Investment Week Tax Efficiency Awards 2017/18 for TIME:Advance. OUR TIME:AIM OFFER TIME:AIM uses our unique ‘smart passive’ approach to select companies listed on AIM for inclusion within the portfolios we create for investors. Designed to offer lower volatility returns than the AIM market, TIME:AIM will only target AIM listed companies that qualify for BR. Available within an ISA and non- ISA wrapper, TIME:AIM provides investors with the opportunity for significant growth potential and mitigation of their IHT liability after only two years. TIME:AIM is the only AIM IHT Portfolio to use a smart passive approach to select companies for inclusion within the portfolio. It’s our view that 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 stock picker bias. A welcome secondary benefit of this approach is that we are able to offer this service with a significantly lower annual management fee than many of the traditional AIM BR fund managers. CASE STUDY TIME’s investment team conducts a regular, quantitative screening process on the constituents of AIM. Our process excludes companies which are either unprofitable or trade on overly high valuation multiples. To reduce the volatility usually associated with the AIM market, our screening process also excludes companies which operate in traditionally high-risk sectors. All companies in the portfolio are regularly monitored to ensure that BR continues to be available. In the event that a company ceases to qualify for BR or intends to de-list from AIM, we will arrange for the shares to be sold as soon as is practicable and reinvested in BR qualifying shares of a different AIM company. Unlike most AIM IHT portfolios, TIME:AIM 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 stock picker’s opinions regarding the future commercial success of companies and the quality of their management teams. TIME’S SMART PASSIVE PROCESS BR QUALIFYING? VOLATILITY? RISK? SUFFICIENTLY LARGE? EXAMPLE FILTERS AIM MARKET AROUND 30 HOLDINGS STELLAR AM ESP AIM ABOUT THE MANAGER Stellar Asset Management was formed in 2007 by our chairman and CEO, both of whom have been at the forefront of tax-efficient investment in the UK since the early 1990s, when they first established Close Brothers Investment Limited. We are an independent firm, wholly owned by our directors and staff, and we have been helping clients plan to mitigate inheritance tax for over a decade. We are solely focused on estate and succession planning, and our clients include individuals, trustees, business owners and those with lasting powers of attorney. We provide a range of tailored services and offer the flexibility of investing in equities or physical assets such as forests, farms and residential property. No matter which service you choose, our fundamental commitment is, and always will be, capital preservation. We then seek to achieve cautious growth which can be distributed or reinvested to fit your requirements. Currently, Stellar has over £300m assets under management and growing. OUR STELLAR ESP AIM ESP AIM is a discretionary managed service, designed to provide investors with IHT relief after two years. The portfolio comprises 40 AIM-quoted companies, all of which qualify for Business Relief, and aims to provide investors with a blend of capital preservation and growth whilst reducing volatility. We believe diversification is key to protecting against market risk, which is why we offer one of the most diversified portfolios on the market. We hold 40 companies across eight of the ten AIM sectors. The notable sector exclusions from our portfolio are Utilities and Oil and Gas and we also do not invest in companies which typically have a binary outcome. We seek to identify companies with an uncomplicated business model, a strong balance sheet with good market valuation and liquidity using a ‘bottom up’ approach; based on fundamentals as opposed to satisfying any predetermined category definitions or weightings. CASE STUDY In 2014, when Fever-Tree listed on AIM, we hesitated at paying a substantial price for shares when earnings were small, and the overall concept was in its infancy. We invested 28 months later. The share price was higher (£15), but so was our certainty of a strong growth trajectory. Fever-Tree products were no longer a niche offering, but a regular on British supermarket shelves. In July 2018 we speculated, however, that at 3617p per share, further growth might prove difficult. Much depended on Fever- Tree ‘cracking’ America, where there is less need for gin mixers. We consequently took some profits at this level and recycled the cash elsewhere in our portfolio. Seeing the shares now at 2092p proves our intuition was correct. Managing a stock like Fever-Tree is entirely different to a mature business in established markets. Both have merit but, given that every stock is unique, our approach is flexible. ESP AIM CUMULATIVE PERFORMANCE Jul 2019 Jan 2019 Jul 2018 Jan 2018 Jul 2017 Jul 2016 Jan 2017 Jan 2016 Jul 2015 Jan 2015 Jul 2014 Jan 2014 Jul 2013 Jan 2013 Jul 2012 Jan 2012 Jul 2011 Jan 2011 Jul 2010 Jan 2010 Jul 2009 Jan 2009 Jul 2008 Jan 2008 -75% -25% 25% 75% 125% STELLAR ESP AIM FTSE 100 FTSE AIM ALL-SHARE