EPIC AIM IHT Portfolio: Outperforming through a baptism of fire

EPIC AIM IHT Portfolio
July 2024

Outperforming through a baptism of fire

Since inception three years ago, the EPIC AIM IHT Portfolio has faced significant challenges and a declining AIM market, down 35% in the period. To quote Warren Buffett: "only when the tide goes out do you learn who has been swimming naked." We are pleased to report that despite the headwinds, the EPIC AIM IHT Portfolio has outperformed the market by over 40% and has been profitable for investors – one of only a small handful of AIM products not caught out by the tide.

As Sir John Templeton wisely observed, "in order to get different results, you need to do something different." Our strategy of focusing on a concentrated portfolio of high-quality, well-managed, and low-leveraged companies has been instrumental in our outperformance. 

Key contributors to this success since inception have been Ashtead Technology Holdings, EMIS Group, and Renew Holdings.

Ashtead Technology Holdings is a leading provider of underwater technology solutions for the offshore energy sector, known for its innovation and service reliability. It enjoys long-term contracts with major energy companies, providing it with stable revenue and good growth prospects. EMIS Group is a prominent healthcare software and services provider in the UK, particularly strong in primary care. Its product portfolio includes electronic health records and digital health solutions, sold on long-term contracts to the NHS offering strong revenue visibility. EMIS Group has now been divested following its acquisition by a UnitedHealth Group subsidiary. Renew Holdings specialises in engineering services for infrastructure, energy, and environmental markets, noted for its delivery of complex projects and benefiting from long-term agreements in regulated sectors such as rail, water, and nuclear power, providing it with stable cash flows and resilience.

It is noteworthy that over a quarter of our initial holdings have been acquired. Among others, K3 Capital, Best of the Best, and Kape Technologies have all been acquired. This significant M&A activity is not coincidental but rather a result of private equity groups capitalising on the highly attractive valuations presented by the market downturn.

By offering exposure to a combination of these companies and the compelling AIM market dynamics, the EPIC AIM IHT Portfolio offers investors the potential for continuing strong returns.

Please do let me know if it would be helpful to arrange a call or meeting to discuss the Portfolio in further detail.

Kind regards,

Malcolm Schembri
Director, Fund Manager