Oakglen Wealth has partnered with Toscafund Asset to launch an inheritance tax (IHT) product featuring an Alternative Investment Market (Aim) portfolio service.
The partnership will allow Oakglen to invest in qualifying smaller companies listed on the Aim on its clients’ behalf, following a model portfolio designed by Toscafund.
The diversified model portfolio of about 30 stocks has been constructed by Toscafund portfolio manager Matt Siebert and seeks to take advantage of the two-year Business Relief holding period.
See also: IHT receipts climb by £400m to record breaking £7.5bn
It targets smaller companies with an average market capitalisation of circa £250m, compared with peers’ £400-700m average.
The portfolio spans 14 broad sectors, with no single sector exceeding 20%. While it is UK-centric, it maintains a global footprint with 30% of revenue derived from Europe and the US. Management and founders of the companies own an average 15% of their businesses.
Dominic Tayler, managing director, Oakglen Wealth, said: “The partnership between Oakglen Wealth and Toscafund represents a significant milestone in our commitment to providing tailored wealth management solutions to our clients.
See also: Sector in review: IA Commodities and Natural Resources
“The small-cap sector is under-researched and therefore often overlooked, despite these companies having a high potential for fast growth and M&A.”
Matt Siebert, portfolio manager, Toscafund Asset Management, added: “For the past three years, the UK SMID-Cap market has materially underperformed global peers due to factors such as falling liquidity, lower equity market exposures and increasing interest rates.
“However, recent developments suggest there are potential improvements. Aim is expected to catch up, helped by the potential introduction of a British Isa and the Mansion House Protocol focusing on pension fund allocations.
“Additionally, the rate cycle is projected to turn, potentially reducing financing costs. Valuations are currently at multi-year lows, attracting investment, and M&A activity continues to be strong.”
