The quality of businesses on the Alternative Investment Market (AIM) is improving, which is good news for investors looking for unique inheritance tax planning benefits, says Fundamental Asset Management (FAM).
FAM, an independent investment management firm specialising in the AIM market, says that over the seven months to end July 2016 there were 30 new admissions (excluding reverse takeovers and re-admissions).
Of these, 25 were qualifying for IHT planning purposes and 16 appear profitable. Of the 60 cancellations, 33 of the companies qualified for IHT planning purposes, 27 didn’t qualify and a significant 46 were loss-making.
The new issues included several substantial, profitable and cash generative businesses. These included Watkin Jones, a developer with a focus on the student accommodation sector, Midwich Group, a specialist audio visual and document solutions distributor and Hotel Chocolat, the premium British chocolatier.
Four substantial companies moved to the main market. This pulled back the overall market value of AIM which would have been even higher than the stated GBP77 billion at end of July 2016 (December 2015: GBP73 billion).
Market movers included Market Tech, GVC, VinaCapital Vietnam Opportunity Fund and Dalata Hotel.
Boxall says: “AIM continues to be a market for small, relatively early stage businesses with pharmaceutical stocks currently popular, replacing the previously fashionable resources sector. However, it is also clearly attracting a growing number of mature, profitable, family or founder controlled businesses who view AIM as a good route to access the capital markets yet still retain an active interest and enjoy the tax benefits of Business Property Relief.”
