When AIM was founded, 20 years ago this year, it was designed specifically as a market for growth companies. That meant that for many businesses, particularly the largest, AIM was and remains to this day, a temporary home to be used as a platform for growth.
In the case of almost 200 companies, including household names such as Dominos Pizza, Fitness First and Hiscox, AIM was a platform for “graduation” to the Main Market. While AIM, the world’s most successful growth market offers quoted companies access to an unrivalled pool of international institutional capital and a well adapted regulatory regime, there are broadly two reasons why businesses choose to move to the Main Market.
Firstly, most institutional investors will typically have significantly larger mandates for Premium listed companies making it potentially easier for them to back high growth, mid-caps looking for further finance. Secondly, when a company reaches a size where it would be included in the FTSE 250 (for which a Premium listing is a condition) it would automatically attract investment from funds tracking the index. The FTSE brand itself also carries weight, and has helped companies looking to grow internationally or seeking to attract overseas investors.
In the next instalment of our AIM to Main series, Marcus Stuttard, Head of UK Primary Markets at London Stock Exchange looks at the UK Corporate Governance Code.