BR Report 2019

58 59 DOWNING DOWNING ESTATE PLANNING SERVICE ABOUT THE PROVIDER Downing LLP is a London-based investment management firm. We aim to help UK businesses grow by investing via our range of enterprise investment scheme (EIS), venture capital trust (VCT), inheritance tax (IHT), individual savings account (ISA) and open- ended investment company (OIEC) products. In addition, in March 2016, we established our own crowdfunding platform. So far, over 35,000 investors have been a part of what we do, and we are proud to have raised over £1.7 billion into businesses looking to make a difference, including energy, care homes, health clubs, pubs, and children’s nurseries. We currently have over £1 billion of funds under management (as at 31 December 2018). OUR OFFERING The Downing Estate Planning Service enables investors to obtain full IHT relief on their subscriptions after only two years (provided the shares are held at death). As at December 2018, the Service has around £380 million of net assets. The Service has a portfolio of more than 70 businesses and focuses on energy companies and asset- backed businesses. It provides monthly opportunities to exit (subject to liquidity and 10 days’ notice), with no exit penalties or charges, and investors can opt to receive regular distributions. We also provide Downside Protection Cover on death under the age of 90, covering a loss in value of up to 20% on the net initial investment – no medical questionnaires or exclusions for pre-existing conditions, and no extra cost. Please note, there is no guarantee that the policy will remain in place after the first two years. Capital is at risk. Prospective investors should be aware that the value of their investment may go down as well as up. There is no guarantee that the valuation of shares will fully reflect their underlying net asset value, or that investors will be able to buy and sell at that valuation or at all. Please refer to the relevant product literature and terms and conditions. INVESTMENT CASE STUDY Life Cover is designed for those under 85 to mitigate the effect of IHT from the date shares are acquired; the policy covers 40% of the original gross investment on death in the first two years. The illustration below shows the IHT liability with and without Life Cover, if the client dies 18 months after investing in DEPS. This in an example only; no forecast is implied. Capital is at risk. Life Cover is subject to conditions (set out in the DEPS product literature) and will not pay out if they are not met in full. The example assumes no growth or loss, that the investor utilises the nil rate band elsewhere and that they pay an adviser charge of 2%. After two years, Life Cover will expire and automatically switch to Downside Protection Cover (provided it is available at that time), designed to reduce the impact of a loss in value of up to 20% of the net initial investment for those aged up to 90 years. WITHOUT LIFE COVER WITH LIFE COVER Investment in DEPS £250,000 £250,000 Adviser charge at 2% (£5,000) (£5,000) Downing initial charge at 2% (£4,900) (£4,900) Net assets £240,100 £240,100 Cost of Life Cover (included within Downing annual management charges of 3.5% plus VAT*) £0 £9,119 IHT at 40% (on death within two years) £100,000 £100,000 Life Cover payout on gross subscription £0 £100,000 Net estate £140,100 £230,981 TIME INVESTMENTS TIME:ADVANCE 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 Business Relief (BR) to offer IHT mitigation for investors. Over 3,000 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 assets under management 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 stable performance and consistent liquidity. To do this we have established a culture that revolves around our clients. TIME:ADVANCE Launched in 2013, TIME:Advance is our flagship IHT service for individuals and to date we have raised over £450m from more than 3,000 investors. The service has received consistent awards recognition, most recently being crowned Best BR Investment Manager non-AIM at the 2018 Growth Investor Awards. The service targets a return of between 3% and 4.5% p.a. by investing in a diversified portfolio of asset backed businesses with a lower risk profile, including secured property lending, renewable energy, commercial forestry and self-storage. The underlying asset-backed businesses of TIME:Advance target a low gross return (c. 6%), which is lower than many other offerings, while still delivering a similar net return. Additional points of differentiation include: • our deferred AMC, which is only taken on exit, from the excess performance over a return of 3.5% p.a.; • the independent oversight provided by our Advisory Committee, comprised of relevant industry experts; • our commitment to rebate some of our fees if early death occurs within the first two years of investment. INVESTMENT CASE STUDY: STORAGE PORTFOLIO Our services own and operate a portfolio of self- storage businesses. These facilities are run on a day-to-day basis by two of the UK’s largest storage management companies, Lok’nStore and Storage King. The income of a storage facility is derived from the management and service fees paid by customers for the secure storage of their goods and belongings in the facility. Additional income is earned through the sale of insurance, merchandise and ancillary services, such as home moving and packing. The operating costs of a storage facility are largely fixed, as are occupancy levels, making revenues relatively predictable. In creating this portfolio, we selected storage facilities with stable levels of occupancy and a strong operating history. The employment of high quality self- storage management allows the portfolio’s facilities to benefit from the nationwide advertising and the operator’s web presence. 2014 2015 2016 2017 2018 2019 3.55% 3.62% 3.74% 3.83% 4.08% 3.53% TIME:ADVANCE 12 MONTHLY PERFORMANCE (TO 31 MARCH 2019)