Marcus Stuttard, Head of AIM at London Stock Exchange looks at why AIM, London Stock Exchange’s growth market is still the world leader for ambitious companies and what business leaders thinking of joining AIM should consider.
In the 20 years since AIM’s launch in 1995, it has established itself as the world’s leading market specifically designed to help growing companies access public capital. Today AIM includes companies operating in more than 100 countries, 40 different sectors and with a combined market capitalisation of over £70bn.
More than 3,500 companies have joined AIM in its 20-year history having raised more than £90bn through new and further issues to support their growth and development. Strikingly, AIM has n
ever been dominated by a single industrial sector even during the dotcom boom in the late 1990s or the commodities super-cycle of the mid-2000s. Today, no sector makes up more than 18% of the total and indeed, new sectors such as nano-technology have joined the mix in the last year.
Central to the development and success of AIM have been three key pillars:
1. A network of advisers and liquidity providers who understand the needs of growing companies and are able to support them throughout their journey as a public company.
2. A regulatory approach that recognises the needs and capacities of growth companies.
3. A diverse and highly knowledgeable investor base that can effectively provide capital to support growing companies.
As a result, AIM companies have access to a range of institutional investors, a vibrant cohort of retail investors and, thanks to London’s unique status, an unparalleled pool of international capital.
Although AIM is designed to meet the needs of smaller companies, joining the market marks an important milestone in any company’s development and is a deliberate decision that will ultimately transform the future of a business. Before beginning the process of even appointing specialist advisors, companies must consider:
• What are the company’s short and long-term ambitions and what are the goals of the company’s current shareholders?
• What is the potential of the company with its current infrastructure, profile and resources? Is there a gap between the company’s current position and its ambitions that a public fundraising could fill?
• Can an IPO enable the company to attract the capital, talent and other resources it needs to fulfil its vision? And just as importantly, is the company likely to be an attractive candidate for public market investors both at the time of the IPO and over the longer term?
• Finally, can the company adapt easily to the expectations of the public market? What are the main changes required to culture, structure, board, governance and/or business practices?
The London Stock Exchange AIM team is here to help too in those earliest discussions and able to advise on the various pathways open to companies well before the IPO process starts. To find out more, please don’t hesitate to get in touch: http://www.londonstockexchange.com/companies-and-advisors/main-market/contactus/contact-us.htm or read our Guide to Joining AIM, https://www.londonstockexchange.com/companies-and-advisors/aim/publications/documents/a-guide-to-aim.pdf
Marcus Stuttard, Head of AIM, London Stock Exchange