AIM, London Stock Exchange
AIM (Alternative Investment Market) is the London Stock Exchange’s international market for smaller growing companies. It serves a wide range of businesses including early-stage, venture-capital-backed companies as well as more established companies seeking access to additional capital for expansion and development.
With a stated purpose of powering the companies of tomorrow, AIM helps international companies raise the capital they need. To date, AIM-listed companies have raised more than £60 billion in new and further capital fundraisings, enabling them to fund their development and pursue their growth ambitions. AIM is a flexible market with a simple admission process that allows more businesses to experience being as a public company and to capitalize on the resulting benefits for their businesses.
Companies join AIM for a number of reasons. For some, but not all, they are looking for immediate capitalization. Others join in order to get a clearer valuation for their company or to raise their profile with investors, customers, suppliers, and the media. Still others may already have a strong balance sheet and want to issue securities at some future point after their admission to AIM.
AIM is currently the most successful growth market in the world. Says AIM’s CEO Marcus Stuttard, companies are listing on AIM not only because of its critical mass of international institutional investors but also because of the high level of support AIM offers. “We’ve created a balanced approach to application and regulation, which facilitates a smooth transition for businesses to become public companies and allows those businesses to focus on growing their business once they’re on the market. We’ve made our process cost-effective so that not only can they do their IPO but they can satisfy their needs for ongoing capital in successive rounds of investment.”
Beginning in October 2004, AIM ceased to be classed as a regulated market under EU laws and became an exchange regulated market. This change was driven by changes in EU law that affected AIM’s regulatory environment. This change of status has enabled AIM to preserve their most of their original admissions process and regulatory structure, which in turn gives the exchange the flexibility that smaller growing companies need.
A listing on AIM also brings access to a network of advisers who are experienced in supporting companies from the time they first consider a flotation and on to helping them raise capital to fulfill their growth potential. AIM also provides a higher profile among London’s unrivalled community of investment analysts specializing in sectors and regions worldwide, and promotion of the company’s image and brand on an international scale through AIM’s highly effective media and public relations team. And, of course, says Mr. Stuttard, “they gain access to an international investor base that has the knowledge and understanding to effectively provide capital as they progress.”
AIM is also the only major growth market that has lived through two complete economic cycles. The fact that AIM companies raised £4.7 billion through further issues during 2009, a year of uncertainty and upheaval in capital markets worldwide, demonstrates how interest in small- and mid-cap companies remains strong among the internationally focused investor community in London.
Since the exchange was launched in 1995, over 3,000 companies from around the world have joined. In fact, AIM presents a particularly flexible and highly accessible environment for overseas companies. To join AIM, a business does not need to be incorporated in the UK, and shares can be denominated and traded in any freely available currency.
Currently over 500 AIM companies have the majority of their operations outside the UK in over 100 countries; 47 of those companies are China-based. “A recent survey of our investors tells us that China is of primary interest as a market for them,” says Mr. Stuttard, “due to its growth potential and dynamic nature. For those Chinese companies with a presence or focus in the UK or Europe, listing with AIM will increase their visibility not only with investors but also with suppliers and management employees.”
As well as being geographically diverse, AIM is able to support the financing needs of companies from over 40 different sectors. “Covering such a wide range of sectors and jurisdictions has made our market more stable, which is of understandable concern to both issuers and investors,” says Mr. Stuttard.
AIM has positioned itself as an excellent public market for growing and entrepreneurial international businesses seeking to expand and raise their global profile as well as successfully raise capital. For investors seeking opportunities, AIM has positioned itself as a disclosure-based market. Companies listing on AIM must maintain a website with key information about the company, its directors, and projects. Additional information is available as well on various third-party sites. “This kind of transparency is critical to a successful market,” says Mr. Stuttard. “The most successful companies, we find, are those with clearly communicated growth intentions who can deliver on their plans and who engage with their investors. We do our best to help all the companies at AIM do this.”
For more information about AIM, call +44 (0) 20 7797 1000.