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The data we collected on the BPR
market can be broken down in a handful
of different ways. The following sections
of this report provide an overall analysis
of the BPR market, looking at how it
has grown in recent years, the different
economic sectors where investments
can be made and the different
structures available for investors
looking to access the market.
We break the data down by:
Structure and objective
Focus
Investment objective
Forecast returns
Charges and fees
OVERALL MARKET ANALYSIS
The first product identified on our
register launched in 1995 and the
market remained very small until 2006.
Since 2006, we’ve witnessed a 90%
growth in the number of products
available. We have identified 52
products in total, of which 37 are still
open for investment today.
We can speculate that the recent growth
in the number of products available may
be down to a combination of factors.
The wealthy baby-boomer generation
is beginning to age and the need for IHT
mitigation is greater; house prices have
soared and the IHT threshold is frozen
at £325,000. Or indeed it may be the fact
that these products are becoming more
popular as both investment managers
and investors are catching on to the
benefits of estate planning via BPR.
Of the products that were collected
on the register, 71% were open to
investment with the remaining 29%
closed to new investment. Many IHT
planning products are operated on a
discretionary basis, rather than through
a fund, meaning that these products are
evergreen. One reason for favouring
evergreen products is that customers
are investing for estate planning
purposes and want their funds to be
invested immediately; investors do not
want to wait for a fund to close for the
2 year qualifying period to commence.
Some specialist products that are
structured as a single company that
act much like a fund do have closing
dates, however products structured as
a personal trading company will most
likely also be evergreen.
Across the market the average minimum
required initial investment was £67,500,
with the mode (the most frequently
occurring figure) at £50,000. This graph
does not include any minimum top up
investments.
One might expect that these products
would have a high minimum investment
level, as they are aimed at wealthier
clients, but the lowest entry level was
just £5,000. This could be another
indication that BPR is becoming more
mainstream and meets the needs of an
increasing number of clients.
On the other hand there are several
offerings with high minimum investment
levels, with the highest being £500,000.
This makes it clear that the ultra-wealthy
also utilise BPR for IHT relief, and don’t
rely solely on gifts and trusts.
However, the cluster of mean, median
and mode at £50,000 - £70,000 shows
where this market is pitching itself.
Minimum additional investment or “top
up” increments varied from £5,000 -
£25,000. It is important to note that any
top up would take a further two years to
qualify for IHT relief.
BPR qualifying assets are not difficult
to identify, and there are eligible
investments across a wide range of
business sectors. BPR products tend
to spread investment across a range of
two or three sectors, mitigating risk.
50
40
30
20
10
0
BPR MARKET GROWTH
(CUMULATIVE N⁰ OF PRODUCTS)
(1995-2015)
INVESTMENT STATUS
29
%
CLOSED
71
%
OPEN
SECTORS
“Since 2005 the product market has grown 780%, with 2013 seeing the most product launches
in one year“
MINIMUM INVESTMENTS
5,000
Min
Max
Average
Median
Mode
500,000
67,500
50,000 50,000
25,000
76.250
Lower
Quartile
Upper
Quartile
