Downing AIM Estate Planning Service ISA

Online application to be available in the 2024/25 tax year

The online application for this service is not currently available for the 2023/24 tax year. It will be reinstated as soon as possible in the 2024/25 tax year. 

The Downing AIM IHT ISA portfolio aims to make long-term investments into smaller, often unloved, AIM-quoted businesses available at what Downing considers to be an attractive valuation. 

The £122 million AIM IHT portfolio is run by Downing Fund Managers, the boutique investment arm of Downing LLP, which manages a total of £547 million (December 2023) across a range of investment funds, all broadly following the same investment philosophy. 

The portfolio offers built-in downside protection insurance for at least the first two years, designed to cover the first 20% of losses on the net initial investment on death, for investors below the age of 90. There is also optional life cover for investors under the age of 85 at the time of investment.

  • Portfolio of 25 to 40 AIM stocks 
  • Value focus with a preference for smaller AIM companies
  • Minimum investment £20,000
  • Apply in an ISA: top up or make a new subscription online using the link below. To transfer existing ISAs, please download, print and complete the ISA Transfer Form and post it to us.
  • Apply outside an ISA: please download, print and complete the application form and post it to us

Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest.

The manager

Downing LLP was founded in 1986 and is a specialist investment management business with a focus on tax efficient investments. Today, the business has c.£1.9 billion in assets under management (March 2023). 

The AIM IHT portfolio is managed Downing Fund Managers (“DFM”), the boutique investment arm of Downing LLP. DFM is headed by Judith MacKenzie who has almost 25 years’ experience investing in small UK businesses. The DFM team now stands at 15 and together they manage £547 million across a number of UK equity investment mandates, £122 million of which is within the Downing AIM IHT & ISA service (December 2023).

Downing is responsible for the day-to-day management of investor portfolios. The Custodian is Third Platform Services Limited, holding shares on investors’ behalf. The downside protection and life cover are provided by an AM Best A-rated insurer.

Meet the manager: Watch our interview with Judith MacKenzie, head of Downing Fund Managers


Investment strategy

The team aims to invest in companies when it believes they are undervalued and there is a catalyst for the company to recover. Companies often become undervalued when there is a perception something is wrong with them, which prevents investors from taking a closer look, causing, in turn, the shares to trade cheaply. For this reason, value investing is not for the fainthearted as some companies in this category may be in financial distress. 

The team takes it one step further, looking to buy a material minority shareholding so as to be able to influence the company management. This can involve working with other institutional shareholders to appoint a new management team with a new strategy, sell off non-core assets, restructure the business, or put in place long-term incentive plans. 

This strategy is applied across all the funds the team manages. Companies in the AIM IHT ISA portfolio will vary in size but will typically have a market capitalisation of no more than £500 million at the time of the initial investment. 

Current portfolio overview

The portfolio currently contains approximately 30 companies, spread across a variety of sectors and the market cap spectrum. There is a skew towards industrial support services and software & computer services, which together account for 37.4% of the portfolio. 

Approximately 50% of the portfolio is currently invested in businesses valued at £250 million or less. The service has limited exposure (11%) to AIM stocks valued in excess of £500 million (December 2023). The average market cap of the portfolio is £303.3 million.

The charts below show the portfolio sector breakdown for the top 10 sectors, which together account for c.84% of the portfolio, and the market cap value distribution.

Sector breakdown (%)

Market capitalisation breakdown (%)

Source: Downing, as at 31 December 2023.

Examples of portfolio companies


Inspecs designs, manufactures, and distributes spectacle frames and lenses. 

The group operates a portfolio of licensed retail brands (including Barbour, Ted Baker, and Marc O’Polo) as well as its in-house brands, which target specific market segments such as Savile Row, a luxury line of 18-karat gold frames.

The business was admitted to AIM in 2020 and ran into difficulty in 2022 after cash flows were impacted by operational issues, low consumer confidence, and unfavourable FX movements. As a result, the share price fell nearly 90% during the year. 

Downing had been monitoring the company and invested in 2023, following the appointment of a new CEO and the introduction of self-help measures, such as improving the efficiency of internal investment and a cost saving programme. 

Revenues remained broadly flat at £200.3 million in a full-year trading update to December 2023. While this was below expectations, the company expects to report improved margins, in line with its focus on operational efficiencies. Construction of a new manufacturing site in Vietnam is underway with completion scheduled for H1 2024. Once fully operational, the site should increase manufacturing capacity to c.12 million units per year.

Inspecs currently has a market cap of £85.4 million (December 2023). 

Ramsdens-Downing-AIM-ISA.jpgRamsdens Holdings

In addition to the team’s strategic investments in companies undergoing some form of turnaround, Downing also looks to back what it views as attractively valued more mature businesses which could provide some ballast to the portfolio. An example is Ramsdens Holdings (“Ramsdens”). 

The company's history can be traced back to Stockton-on-Tees in the 1970s with its first store opening in 1987. Today, Ramsdens is a diversified, financial services provider and retailer, operating in the four core business segments of foreign currency exchange, pawnbroking loans, precious metals buying and selling and retailing of second-hand and new jewellery. It has 165 stores (including two operated under a franchise) and a workforce of over 800.

Ramsdens's strategy focuses on increasing its branch footprint in the UK as well as developing an online proposition for each division. 

In the year to September 2023, the company reported revenues of £83.8 million, up 27% year-on-year. Profit before tax also rose, up 22% to £10.1 million, however, margins fell slightly within the jewellery and foreign currency divisions. The progress over the period resulted in Ramsden increasing its total dividend 16% to 10.4p per share. Past performance is not a guide to the future.

The current market cap of the business is £70.6 million (December 2023). 

Alliance Pharma 

As is to be expected, not all investments work out. Alliance Pharma (“Alliance”) is an example. 

Alliance is an international healthcare group which specialises in marketing healthcare and pharmaceutical products. The Group has a large portfolio of consumer brands and prescription medicines which it sources through acquisitions or licensing deals. 

In 2022, the Group’s share price declined sharply following disappointing half-year results and a fine from the Competition & Markets Authority (CMA) amid an ongoing investigation. These factors, plus concern over a potential acquisition, led Downing to remove the position from its model in August 2022 and sell down the holding across all client accounts.


The Downing AIM IHT Service was launched in March 2014. The chart below shows performance over five years compared with other AIM IHT portfolios available through Wealth Club. 

The track record prior to December 2019 is based on the return of first investor’s portfolio in the Downing AIM Estate Planning Service and the Downing AIM ISA Service, net of fees. From December 2019 onwards, all investors’ performance across both products have been consolidated, on a net of fee basis. 

Like other IHT portfolios, this is a discretionary managed service so each portfolio is likely to be different. 

Five-year cumulative performance to 31 December 2023

The default view is the performance for this particular offer. You'll be able to see the performance of other AIM ISA offers if you click on the portfolio names above. Source: Downing and other AIM ISA managers. Performance is shown net of fees, excluding initial charges, with dividends reinvested, based on the average portfolio performance across the service, except for Puma which shows the performance of one example portfolio. Past performance is not a guide to the future. Dividends are variable and not guaranteed.

Five-year discrete performance

AIM IHT portfolio 2023 2022 2021 2020 2019 Five years to 31 Dec 2023
Downing AIM IHT 6.5% -10.2% 26.7% -3.4% 16.6% 36.4%

See five-year discrete performance comparison of all available AIM IHT portfolios

Source: AIM ISA managers (31 December 2023). Performance is shown net of fees, excluding initial charges, with dividends reinvested, based on the average portfolio performance across the service, except for Puma which shows the performance of one example portfolio. Past performance is not a guide to the future. Dividends are variable and not guaranteed.

Downside protection cover and optional life cover 

Investors in the Downing AIM IHT ISA service can benefit at no extra cost from a downside protection policy underwritten by an A-rated insurance provider.

Key details of the downside protection cover are:

  • Covering a loss in value of up to 20% of net initial investment, after fees, for at least two years
  • Automatically available to all subscribers under the age of 90 at death
  • No exclusions for pre-existing medical conditions
  • No medical questionnaires
  • No additional cost to investors: the premium is paid by Downing

There is also a separate and optional life cover policy for the first two years, which effectively makes the portfolio IHT free from day one. The policy is designed to pay 40% of the gross subscription (including all fees) in the event of death within the first two years. Investors must be under age 85 at the time of making investment to qualify. Investors opting for the life cover policy will only start benefiting from the downside protection cover after two years. 

Terms and conditions apply, and some exclusions also apply to the life cover option: please read the provider documents carefully.

Access to your investment

Investments in this portfolio are for the long term. However, if your circumstances change, you can sell some or all of your shares, although sometimes this can take a while depending on market conditions and liquidity. Partial withdrawals are subject to a minimum remaining portfolio value of £15,000. In normal market conditions, Downing aims to fulfil withdrawal requests within 15 working days but this is not guaranteed. For large withdrawal requests, Downing reserves the right to take longer as it may be required to ensure the orderly disposal of investments. Any amount you withdraw will no longer be IHT free. Withdrawals may result in a Capital Gains Tax liability unless held in an ISA. 

Risks – important

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice. Those considering AIM Inheritance Tax Portfolios should be comfortable with the significant risks of investing on AIM.

AIM IHT portfolios should only form part of a balanced portfolio. Your capital is at risk and you should not invest money you cannot afford to lose. If a service is managed by a small investment team, it could create key person risk. The fewer the companies included in the portfolio, the higher the risk of loss if things don’t go to plan. 

AIM stocks can be hard to sell, particularly at the smaller end of the market, and can be illiquid. AIM shares can be very volatile especially if the market falls sharply. The difference between the buying and selling price (spread) of AIM shares is often wider than the spread for shares listed on the main market. 

Eligibility for BPR, based on current rules, is assessed at the date of death and will depend on the companies in the portfolio remaining qualifying. Broadly speaking, you will need to have held a BPR qualifying stock for at least two years and still hold it on death to qualify. Tax rules can change and benefits depend on circumstances.

Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

In recent months, there have been widely reported rumours that the government might change or abolish IHT. It is currently unknown if and when any decision might be announced.  


A summary of the main charges and savings is shown below. The investment may have additional charges and expenses: Please see the provider documents for more details. If you would like a full breakdown or a personal illustration, please let us know.

Full initial charge 2%
Wealth Club initial saving 1%
Net initial charge through Wealth Club 1%
Annual management charge 2%
Administration charge
Dealing fee £35
Performance fee
Exit fee
Optional life cover (two years) 2.25%
All fees and charges are stated exclusive of VAT, which may be applicable in some cases.

See example of the total charges over 5 years

Our view

The Downing AIM ISA comes with an innovative downside protection policy at no additional cost to investors. It aims to cover a loss in value of up to 20% of the net initial investment for at least two years if you die before the age of 90. The policy could be appealing as it reduces some of the risks of investing in AIM.

Another point of interest is the optional life cover for the first two years (an additional premium applies for this).

Judith MacKenzie is a highly regarded fund manager with more than two decades of experience investing in smaller companies. 

The focus on smaller, and often unloved companies may bring diversification to existing portfolios of larger and more popular AIM stocks. 

The portfolio’s fees are higher than some of its peers. The minimum of £20,000 could make it a contender for this year’s ISA subscription.

See five-year performance of shares mentioned above

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination. 

The details

Portfolio size
£122.0 million
Average market cap
£303.3 million
Initial charge
Saving via Wealth Club
Net initial charge
Last updated: 23 February 2024

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