28-May-19

Navigating a BR pathway to uncorrelated equity returns

Choosing an investment that provides stable returns that are uncorrelated to equities is a significant challenge for UK investors. The search has led many down a variety of paths, with an increasing number of options and alternative solutions being launched. But whilst investors’ are searching for strong uncorrelated investments, a growing number are also faced with the challenge of planning for inheritance tax (IHT) liabilities. 

Business Relief (BR), also known as Business Property Relief (BPR), has been a fundamental part of inheritance tax legislation since 1976. As an investment incentive, it’s simple and straightforward. Once BR-qualifying shares have been owned for at least two years, they can be passed on free from inheritance tax on the death of the shareholder.

Recent reports indicate that financial advisers are increasingly using IHT solutions for their clients. In 2018/19 IHT receipts totalled £5.4bn, which is up by a staggering £600 million since 2016/17. What’s clear is that with the ever-growing concern that client’s estates may have an inheritance tax bill, having the ability to plan for this scenario has become much more of a centre piece for the advice process.

Triple Point Estate Planning Service (‘TPEPS’)

In 2013, Triple Point launched the Estate Planning Service which matches investors’ needs and aspirations with unique business opportunities. ‘TPEPS’ offers investors two unique and important investment opportunities both with compelling track records of delivering year on year solid returns. Additionally, the Service can achieve 100% relief from inheritance tax (IHT) on the amount invested, after 2 years through business relief.

“Triple Point’s award-winning service provides you with two unique and important investment opportunities.”

Belinda Thomas, Triple Point’s Head of Sales and Investor Relations.

Triple Point’s Estate Planning Service is the only provider enabling private investors to access the commercially attractive trades of leasing and lending, formerly the preserve of banks and big financial institutions. The two investment opportunities are to either TP Leasing Ltd or Navigator Trading Ltd or a blend of both.

TP Leasing Ltd (‘TPLL’) is a leasing, lending and infrastructure finance business. It focuses on providing a smaller number of high value leases to good quality customers, like an MRI scanner or an ambulance to an NHS Trust, or an asset such as a gritter or refuse removal vehicle to a local authority. The target return to Triple Point’s clients is 1.5% to 2.5% (net of fees).

Navigator Trading Ltd (‘NTL’) provides different types of backing to UK based small and medium sized enterprises (SMEs). It focuses on providing large numbers of smaller leases and loans, to a diverse spread of businesses, and manages risk by carefully analysing the underlying deals – individually and in aggregate.  And just like TP Leasing Ltd, NTL has demonstrated consistent achievement of its targets, delivering annualised returns to Triple Point clients comfortably within its 4.0% to 6.0% target (net of fees).

“The Service was designed to provide one inheritance tax planning solution that allows the investor the opportunity to access a blend of Navigator Trading Ltd and TP Leasing Ltd in one simple application; selecting their portfolio allocation according to their individual preferences and requirements.”

Diversity

“Through funding a wide range of businesses and organisations across multiple industries, investors benefit from access to a highly diversified lending and leasing strategy.”

“For example, Navigator Trading Ltd has deployed circa £300 million into loans and leases since inception across 100,000 customers. And we are confident that it is exactly this type of diversification, across truly unique sectors, that provides the uncorrelated exposures that today’s investors seek – a true differentiator.”

“We are also pleased to reflect that the Service is aligned with the government’s overall objective of supporting SMEs which will fuel growth in the UK’s economy. Through the provision of specialist leasing and lending we are able to strongly support the SME sector in a responsible and reliable way; often stepping into areas that the high street banks left behind in 2007 and have not returned to.” 

“Ultimately, we want clients to be able to invest in a diverse range of growing businesses, with good solid returns. This means that returns are not dictated by movements in equity markets and are not dictated by the fortunes of any one sector. The closest correlation is probably to movements in interest rates, where returns will track interest rates up (or down) in the medium and longer terms.”

“Due to the broad spread of counterparties, diverse sectors and high volumes of individual transactions, risk is both broadly distributed and manageable.”

 ‘Experience with a proven track record’

Triple Point has been successfully investing in leasing and lending since 2006 and currently has over £1.4 billion of assets under management. As well as being a leading alternative investment manager, we manage one of the largest privately capitalised leasing businesses in the UK.

“What sets us apart in the alternative marketplace is over 13 years of private capital leasing and lending experience, gained through full cycles in the economy. Triple Point now has over £410m invested in our BR strategies, and our track record since 2006 makes us one of the most experienced BR managers in the market.”

If you have any further questions about our Estate Planning Service, or any of our other investment solutions, which include our Income Service, Impact EIS Service and Venture Fund VCT, please get in touch on 020 7201 8990.

Risk Warning: The Triple Point Estate Planning Service places capital at risk. As with any investment, there is no guarantee that the target return will be achieved and investors may get back less than the amount they invested. Past performance is not a guide to future performance. Tax treatment depends on the individual circumstances of each client and is subject to change.

Click here to find out more about the Triple Point Estate Planning Service

Triple Point is the trading name for the Triple Point Group which includes the following companies and associated entities: Triple Point Administration LLP is authorised and regulated by the Financial Conduct Authority under firm reference number 618187. Triple Point Investment Management LLP is authorised and regulated by the Financial Conduct Authority under firm reference number 456597.

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