Puma AIM IHT ISA

This AIM IHT service is managed by Puma Investments, part of Shore Capital, one of the largest AIM market makers. It is a discretionary investment portfolio of around 20-25 companies which are expected to qualify for Business Property Relief.  

On 30 April 2021 , Puma Investments announced its Investment Director Justin Waine is due to leave. Justin joined Puma investments in June 2014 and launched the AIM IHT service the following month. 

Puma Investments has appointed Dr Stuart Rollason to head up the AIM IHT service. Dr Rollason is an experienced small and mid-cap investment professional, with 20 years’ experience. He joins from Kestrel Partners LLP, where he led the management of the AIM IHT service for a decade.  

An updated review and online application for the Puma AIM IHT Service will be available soon.

Important: The information on this website is for experienced investors. It is not advice nor a research or 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, so you could get back less than you invest.


Highlights

  • Focused portfolio of 20 to 25 AIM-quoted companies
  • Often family-owned or founder-controlled firms
  • Minimum investment £20,000
  • Available both in an ISA and outside an ISA

The manager

The Puma AIM IHT service is managed by Puma Investments, part of the Shore Capital group.

On 30 April 2021, Puma Investments announced the Investment Director Justin Waine is due to depart. Justin joined Puma investments in June 2014 and launched the AIM IHT service the following month. After seven years with Puma Investments, Justin is set to join another fund management business with a broader investment mandate. 

Puma Investments has appointed Dr Stuart Rollason to head up the AIM IHT service. Dr Rollason is an experienced small and mid-cap investment professional, with 20 years’ experience. He joins from Kestrel Partners LLP, where he led the management of the AIM IHT service for a decade. 

Investment strategy

The investment strategy employed under Justin Waine is detailed below. The new manager, Dr Stuart Rollason is expected to continue with the same strategy and increase the number of holdings in the portfolio.

The portfolio targets mature AIM businesses screened across three key metrics: quality, growth and value. Capital preservation is also a priority.

The strategy focuses on two kinds of companies: firstly, family or founder-owned, as they often are on AIM for Business Property Relief reasons; and secondly companies controlled by a successful entrepreneur. Long-term “buy and build” holdings are also considered.

The service seeks businesses with potential returns above the cost of capital. Discounted cash flow analysis is done for every company using Puma’s own internal metrics and analysis and a fair value price target is set.

In addition, the portfolio seeks companies with decent margins, sales and profit growth and a sensible balance sheet. Having a cheap share price isn’t the most important factor for Puma. A strong balance sheet is more important, in their view. The firm looks at companies with a market cap of at least £50 million.

The targeted hold period for investments is three to five years but longer positions will be considered if the company continues to improve and valuations remain sensible. Holdings will be sold when companies reach what Puma considers to be an appropriate fair value or if the investment team change its view on a stock. Puma believes it is better to exit a position sooner –  even if this results in a loss – than potentially incur a greater loss later on.

Portfolio

Investors will each hold a portfolio of around 20-25 shares – expected to increase to around 35 (not guaranteed). This is currently a relatively concentrated portfolio when compared with its peers. Each portfolio aims to closely mirror the investment director’s own portfolio but individual portfolios will vary.

The portfolio seeks to be fully invested in AIM shares, with only a small cash position (approximately 2-5%). The average position size is 2% to 6%, with no position expected to be greater than 10% of the portfolio.

The portfolio avoids early-stage companies such as loss-making miners, biotechnology companies and high-growth concept stocks, as well as small companies with a market cap under £50 million.

Currently, the average market capitalisation of companies in the portfolio is £486 million (March 2021). The chart below shows the portfolio sector breakdown for the top 10 sectors, which together account for c.92% of the portfolio. 

Source: Puma Investments, 31 March 2021.
Source: Puma Investments, 31 March 2021.

Examples of portfolio companies

Focusrite – Puma AIM IHT ISAFocusrite

Established in 1989, Focusrite has developed a range of high-quality audio recording and production equipment. Due to the diversity of its products, the company caters to a wide audience, from casual artists to professional studios. 

Its products have been used for festivals, such as for multiple stages at Glastonbury, tours, theatre productions, and occasionally for church services. So far, the company has expanded to more than 160 territories globally and has grown revenues from £48 million (FY 2015) to £130.1 million (FY 2020). The company will look to enter new forms of media such as podcasting and streaming, as well as acquiring businesses that offer strategic and cultural advantages. 

Puma invested in the company due to the strength of its brand and diversified customer base. The company is now the largest holding within the portfolio, accounting for 8.3% of the portfolio (as at March 2021).

Renew Holdings – Puma AIM IHTRenew Holdings

Over two centuries old, Renew Holdings has a certain pedigree within the services industry. Its largest business is providing engineering support to companies within energy, environmental and infrastructure sectors. This can include everything from nuclear decommissioning to building flood defences and maintaining rail networks. 

Puma invested due to the company's specialisation, revenue diversity, and growth potential. The company is expected to benefit from a number of government-backed incentives such as the £3 billion per annum nuclear decommissioning programme as well as Network Rail's £48 billion plan to improve rail infrastructure over the next four years.

Renew Holdings is currently the third largest holding in the portfolio (as at March 2021) with a weighting of 7.2%. 

Patisserie Holdings plc

As is to be expected, not all investments work out. A recent example is Patisserie Holdings plc.

Patisserie Holdings plc was formally placed into administration in January 2019 following the discovery of extensive fraudulent accounting irregularities back in October 2018. The shares have been marked down to zero with no return expected for shareholders.

Performance

Please note the chart below is prepared quarterly, to 31 March 2021.

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: Puma 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 and Fundamental which shows the performance of one example portfolio. Past performance is not a guide to the future. Dividends are variable and not guaranteed.

Risks – important

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.

AIM IHT portfolios are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

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 of AIM quoted shares is often wider than the spread for shares listed on the main market.

Tax rules can change and benefits depend on circumstances. Eligibility for BPR 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.

One further risk is that this is a more concentrated portfolio than other IHT portfolios with around 20-25 stocks, placing more importance on the stock-picking abilities of the manager. The portfolio centres on Justin Waine so there is some key man risk.

Treasury review

A previous Chancellor requested a review of IHT to simplify the tax system. A report was published in July 2019, but this has not yet led to any rule changes. Please remember, tax rules can and do change and benefits depend on circumstances.

Charges

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 4%
Wealth Club initial saving 3%
Net initial charge through Wealth Club 1%
Annual management charge 2% plus VAT
Dealing fees 1%
Performance fee nil
Exit fee nil

See example of the total charges over 5 years

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 – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. 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
£60.3 million
Average market cap
£470.0 million
Initial charge
4.0%
Saving via Wealth Club
3.0%
Net initial charge
1.0%
AMC
2.0%
Last updated: 5 May 2021