Toscafund Asset Management, an expert investment manager with about $2.5bn in assets under management, and Oakglen Wealth, an independently owned wealth manager with offices in Jersey and London, have teamed up.
As a result, Toscafund and Oakglen have established an inheritance tax solution that offers an Alternative Investment Market portfolio service.
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The agreement will enable Oakglen to invest in eligible smaller businesses listed on the Alternative Investment Market (“AIM”) at the request of each of their clients, using a Toscafund-designed model portfolio.
Toscafund portfolio manager Matt Siebert carefully designed the diverse model portfolio of approximately 30 equities, with the goal of leveraging on the two-year Business Relief holding period.
It focuses on smaller enterprises with an average market value of around £250m ($317m), compared to peers’ £400-700m, and spans 14 major industries, with no single sector topping 20%.
While the model portfolio is focused on the United Kingdom, it has a global footprint, with 30% of sales coming from Europe and the United States, providing investors with exposure to both international and domestic markets.
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By GlobalDataImplementing fundamental study, reliable risk management, and thorough company screening as part of the selection process has resulted in the Tosca Micro-Cap UCITS fund, on which this solution is based, outperforming the AIM All-Share Index with an annualised alpha of 2.2% since inception to 31 December 2023.
Moreover, the Oakglen AIM IHT solution, developed in collaboration with Toscafund, is intended to provide appealing valuation measures, showing strong top-line growth, solid margins, and cashflow with minimal leverage.
Dominic Tayler, managing director – UK, Oakglen Wealth stated: “The partnership between Oakglen Wealth and Toscafund represents a significant milestone in our commitment to providing tailored wealth management solutions to our clients. The Small-Cap sector is under-researched and therefore often overlooked, despite these companies having a high potential for fast growth and M&A. This creates an excellent opportunity for those able to exploit this inefficiency and with Toscafund’s proven track record in the Small and Mid-Cap space we’re thrilled to be able to offer this AIM portfolio IHT solution to our clients.”
Siebert 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. The IHT solution is strategically positioned to capitalise on these evolving market dynamics, and we aim to outperform the AIM All-Share Index by 5% over the cycle.”
