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The standout positive performer was EMIS after the takeover announcement, this was followed by Young & Co’s Brewery, with a 14% return

The Luna AIM portfolio delivered a return of -12.4%* during the second quarter which was ahead of the FTSE AIM All Share TR index of -15.6%*. We are conscious that this is a very short term time period, when taking a slightly longer term perspective from launch (01/06/2020 to 30/06/2022) the Luna AIM Portfolio has also outperformed returning 10.1%* compared with the FTSE AIM All Share TR of 2.2%*.

This quarter we made two changes to the Luna AIM portfolio primarily due to imminent takeovers which would remove these companies from AIM and therefore become non-qualifying for business relief.

EMIS has agreed to a £1.24 billion takeover offer from Optum Health Solutions UK Ltd, a subsidiary of Minnesota, US-based healthcare and insurance company UnitedHealth Group Inc. and the share price was up 41% in June.

Earlier in the year CareTech Holdings was bid for by both DBAY Advisors Ltd and Amalfi Bidco Ltd, a consortium which includes CareTech founders Farouq and Haroon Sheikh and THCP Advisory Ltd.

In June, CareTech Holdings accepted the takeover bid from the Amalfi Bidco Ltd consortium which will pay a £7.50 cash consideration, a 28% premium to CareTech’s share price on March 4, the day before the Sheikh brothers said they were in the “early stages” of forming a takeover consortium.


We are going to reinvest into two AIM qualifying companies;

Hotel Chocolat, the well-known, high quality, luxury chocolate retailer. We are keen to take advantage of the fall in the share price which has been triggered from higher inflation and the impact that could have on consumer spending power. The share price has also been under inflationary pressure coming from higher raw material and staffing costs.

Whilst we acknowledge these risks are still present, a lot of this has been priced into the value of the company already with the share price falling from £5.25 at the beginning of the year to £2.85 currently.

Frontier Developments, the videogame developer that has developed games like Rollercoaster Tycoon and Jurassic World. This is a high quality growth business which has seen the share price down 40% over the last year.
Despite the poor share price performance, the company has continued to deliver and recently announced record annual revenue.

During the quarter the standout positive performer was EMIS after the takeover announcement, this was followed by Young & Co’s Brewery, with a 14%** return. The service sector continues to accelerate with restrictions being eased in the UK and more recently the share price has been helped by the long Jubilee weekend with Young & Co’s Brewery well positioned for that growth. The company returned to profit last year and has resumed paying dividends.


It was not all good news in the period. Boohoo, the online fashion retailer, was under pressure and the shares fell by 40%**. Boohoo saw revenue fall 8% to £445.7 million in the three months to 31 May, partially explained by tough pandemic comparables, but also by increased levels of customers returning goods. Sales fell in almost every region, with its worst performance in the US.

UK sales fell by 1%, their first fall ever, before returning to growth in May. However, Boohoo had already warned that sales would fall this quarter, and it’s still forecasting a return to growth in Q2 and overall revenue growth in the ‘low-single digits’ for the entire financial year.


In summary, overall it was a tough absolute quarter for the AIM portfolio with the market backdrop providing difficult conditions for investors. Although on a relative basis, compared to the FTSE AIM All share, the M&A activity has helped outperformance.

Please remember that the AIM portfolio has been created to invest in companies that qualify for Business Property Relief (BPR) and in doing so are therefore can be outside of the estate for Inheritance Tax Purposes (IHT)***.  Whilst delivering long term strong performance is obviously welcome, we are looking to mitigate share price weakness that would negate the reason for investing in AIM (saving 40% IHT).

* Source: MorningStar Direct
** Source: Alpha Terminal
*** based on current tax legislation and holding the assets for a minimum qualification period


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