Sanlam UK, the British arm of the South Africa-based and listed Sanlam financial services group, today pulled the wraps off of a new service it says will enable clients to “mitigate” their inheritance (IHT) liabilities while generating long-term growth “by investing in smaller companies”.
The new scheme is designed to provide clients with exemption from IHT through what is known as “Business Property Relief”, or BPR, by facilitating their investment in a diversified portfolio of shares listed on the London Stock Exchange’s Alternative Investment Market.
In a statement, Sanlam UK said its portfolio would be comprised of some 25 to 45 shares in AIM-listed stocks “across a range of industries, and with solid earnings growth potential”.
Investors in the new scheme “will be able to hold the shares in an ISA or SIPP, and can add or withdraw money at any time,” the Sanlam UK statement added.
“Each stock will go through an extensive screening process to try to ensure qualification for BPR as well as reassuring investors of the potential for long-term growth.”
Those who invest in the Sanlam service will pay an initial charge of 1.5% plus an annual management fee of 2%. In addition value-added tax will be levied on investors’ portfolios, Sanlam UK said.
Launchpad for smaller companies
The LSE’s Alternative Investment Market was created in 1995 in order to provide a place for smaller companies looking to find the capital they needed to grow to come together with investors interested in the unique investment opportunities small companies typically offer. Over the subsequent 23 years, more than 3,000 companies have been listed on AIM, and raised more than £60m from investors.
Such smaller companies are, though, often perceived as “higher risk” than more established businesses, Sanlam UK noted.
Founded in 1918 and based in Cape Town, Sanlam has a market capitalisation of around £12.1bn. The group provides a range of financial products and services to more than 10 million clients globally, including insurance, financial planning, investments and wealth management.
The UK operation, headed up by chief executive Jonathan Polin, consists of a number of businesses, including Sanlam Private Wealth, a discretionary fund manager; Sanlam Investments & Pensions, a life and pensions business; Sanlam FOUR, a boutique asset management and fund business; and Sanlam Wealth Planning, a financial advisory business.
