AIM Industry Report 2017/18

3 Welcome to the second edition of the Alternative Investment Market Industry Report (AIM) AIM is known as the world’s most successful growth market and it has been focused on providing capital to companies looking to fund their development and pursue their growth ambitions since 1995, well before the 2015 changes to EIS and VCT, the Brexit vote, the Patient Capital Review and the 2017 Autumn budget. Be that as it may, AIM’s competition is arguably growing, with the rise of equity crowdfunding and more stock markets operating in this sector, equity investments are at the mercy of volatile economic and political conditions and a review of its rules threatens a tighter regulatory regime. Why then, in mid-2017, did the FTSE AIM All-Share index climb past the 1,000 level for the first time since the summer of 2008? There is no doubt that these are complicated and unpredictable times, but it is also clear that firms, especially smaller, younger ones, continue to need affordable finance, investors continue to look for value and growth and advisers continue to search for solutions to their clients’ financial planning dilemmas. Within this context, our research shows that, as advisers become more experienced with recommending AIM-based investments, they become more comfortable with suitability and due diligence issues and more focused on the best value for money funds or portfolios. As present interest in the asset class remains high and future usage for retail investors is predicted to increase, we think it is an important time to explore the AIM market in terms of advisers’ and providers’ views on what it currently offers. Access to tax efficient investments, particularly Business Relief products, remains a conspicuous driver. Supporting UK SMEs is also a very high priority for some investors. We think that this dynamic market is one that all advisers should gain an understanding of and we hope this report is a useful snapshot of today’s market, revealing new insights into AIM. GUY TOLHURST Managing Director Intelligent Partnership FOREWORD Editorial Lisa Best Daniel Kiernan Creative Mar Alvarez Estela Alcay Sub-editing Daniel Kiernan Lisa Best Research Lisa Best Ryan Zeng Alan Sheehan Katie McCarthy Marketing Michelle Powell Jeremy Gordon Print Palina Limited Copyright © Intelligent Partnership 2018 DISCLAIMER This publication is not included in the CLA Licence so you must not copy any portion of it without the permission of the publisher. All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means including electronic, mechanical, photocopy, recording or otherwise, without written permission of the publisher. This publication contains general information only and the contributors are not, by means of this publication, rendering accounting, business, financial, investment, legal, tax or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Neither the contributors, their firms, affiliates nor related entities shall be responsible for any loss sustained by any person who relies on this publication. The views and opinions expressed are solely those of the authors and need not reflect those of their employing institutions. Although every reasonable effort has been made to ensure the accuracy of this publication, the publisher accepts no responsibility for any errors or omissions within this publication or for any expense or other loss alleged to have arisen in any way in connection with a reader’s use of this publication. This publication is based on the authors’ understanding of the structure of the arrangements detailed, the current tax legislation and HM Revenue & Customs practice as at September 2017 which could change in the future. It is not an offer to sell, or a solicitation of an offer to buy, the instruments described in this document. Intelligent Partnership is not authorised and regulated by the Financial Conduct Authority and does not give advice, information or promote itself to individual retail investors. It is the responsibility of readers to satisfy themselves as to whether any arrangement contemplated is suitable for recommendation to their clients. Tax treatment depends on an investor’s individual circumstances and may be subject to change. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.