Janus Henderson Investors  

Henderson looks to Aim to dodge Brexit risk

Henderson looks to Aim to dodge Brexit risk

James Henderson, who runs three funds at Henderson Global Investors, is looking to shares listed on the Alternative Investment Market (Aim) for returns

Mr Henderson said the success or failure of companies listed on the Alternative Investment Market (Aim) is not reliant on the health of the UK economy and the historic under performance of the market means many investors shun these shares, creating an opportunity.

He said: "Many of the new, young companies on Aim will fail but this will primarily not be the fault of economy but rather their inadequacies as a business.

"In the same way the winners will succeed because of their own efforts and excellence of product. It is refreshing every time to meet and talk to a new young company on Aim.

"For a start Brexit is unlikely to be mentioned. The successes come in many different areas of activity. A tonic water producer Fevertree and robotics company Blue Prism are two of the stars this year, while Scapa an industrial tape company and Johnson Services, a laundry business, have given very strong returns in recent years.

"Success, like failure, comes in many different areas. An interesting characteristic of Scapa and Johnson Group is that they were both once quoted on the main market. They had become problem riddled old companies.

"The move to Aim and new management teams meant they rediscovered their purpose and drive. This shows it is not only young companies that succeed on Aim but an old company can reinvent itself.

"It is the lighter regulations and lower costs that mean some companies leave the main market to join Aim and these can be important factors in their recovery plans."

Mr Henderson said investors have been negative about Aim shares due to that market having delivered a negative return for most of its existence.

He said the negative return is the result of the Aim investors following market fads in areas such as internet stocks and oil and gas exploration.

But Mr Henderson said in the past year, returns from the Aim market have been strong, with no one sector dominating.   

Adrian Lowcock, investment director at Architas, said: “ Aim shares can be exciting and there is the potential for fast growth the market overall has failed to live up to this expectation – there are a lot of Aim companies which fail or don’t go anywhere for years.

"Performance is key, but can take a few years to become visible."

david.thorpe@ft.com