AIM specialist investment managers Fundamental Asset Management reports that, for the first time in 12 years, the number of companies listed on the Alternative Investment Market (AIM) has fallen below 1000: but the companies are bigger.
The firm details that while the number of stocks on AIM fell to 995 in October, two sizeable new companies listed. These were Premier Asset Management and Van Elle Holdings.
The market value of AIM fell from GBP82.98 billion at the end of September to GBP80.83 billion as seven companies left including Pinewood Group which was the subject of a takeover and Secure Trust Bank which moved to the main market.
Chris Boxall (pictured) at Fundamental Asset Management (FAM), the independent investment management firm specialising in the AIM market says: “The new arrivals, both of which are quite substantial businesses, yet again highlight the changing nature of AIM.
“It seems as though the crowd funding platforms now offer a more viable funding route for very small, earlier stage companies who need smaller amounts of capital, many of which come with Enterprise Investment Scheme (EIS) attractions. Smaller companies may have previously chosen AIM but it’s much less expensive and far quicker for them to simply go to the crowd for money. AIM is therefore becoming a destination for larger businesses where family or private equity owners may be looking for a partial exit.”
“Leading small cap managers, all of whom now manage much larger pools of money than a few years ago, are also keen to support larger issues where they can acquire a more meaningful stake.
“The concern from a crowd funding perspective is that many of the crowd funders appear to be less concerned about valuation, with the result that many early stage businesses on the crowd funding sites are raising money at what appear to be relatively high valuations. This could cause problems in the future as early stage crowed funders are massively diluted in future funding rounds or see little in the way of long term return.”
