On 19 June 2020, the London Stock Exchange’s Alternative Investment Market (AIM) celebrated its 25th anniversary.
Founded in 1995, AIM allows smaller, dynamic and growing companies to raise capital by listing on a public exchange with greater flexibility than the Main Market.
Over the past 25 years it has become the world’s most successful market for buying and selling shares in small and mid-cap businesses.
When it was launched, AIM comprised only 10 companies with a total capitalisation of £82 million. Since then, over 3,600 businesses from around the globe have chosen to list on the exchange, which is currently home to 850 companies with a total capitalisation of over £100 billion. These come from sectors including finance, healthcare, technology, natural resources, and property.
Ahead of the 25th anniversary, Saffery Champness was named the ‘outstanding performer’ in the April 2020 AIM Adviser Rankings, expanding its client base by 50% in Q1 2020. The firm’s AIM team acts for clients across a range of sectors including property, life sciences, natural resources, financial services and technology.
“The 25th anniversary of AIM could not have come at a more pivotal time for the market, or for small and mid-cap businesses more generally. Covid-19 has caused unprecedented disruption to the market, however in many ways the attributes which made AIM successful in the first place, its raison d’être, may be exactly what propels the market and its constituent businesses through this period of profound uncertainty.
“One of the defining characteristics of AIM since its inception is its flexibility and the support provided to fast-paced, innovative businesses. AIM has attracted highly innovative businesses with long-term growth trajectories, from healthcare and pharmaceuticals, to tech and telecoms, and many of these businesses have the agility to adapt swiftly to changing operating conditions. While Covid-19 has undoubtedly presented challenges to many, if not all, AIM companies, it has also presented opportunities. Healthcare and pharmaceutical businesses for example, which amount to approximately 10% of the firms listed on the market, have been evidently well placed during the pandemic.
“Meanwhile, those companies whose product or service lends itself to a marketplace where consumers are confined to their homes have been able to continue to deliver value. E-commerce businesses, of which there are a number of high-profile examples listed on AIM, have had a largely favourable consumer market to operate in, with the ONS reporting that in April online retail sales had increased by over 30% from the previous month.
“While Covid-19 has dominated the thinking of most AIM companies for a number of months, and will likely continue to do so for the foreseeable future, it is easy to forget that major challenges also stem from other sources, and businesses cannot afford to be asleep at the wheel.
“The tightening of regulatory oversight would certainly fall into this category. As a consequence of the FRC’s Revised Ethical Standard, AIM-listed businesses are facing a shifting regulatory landscape when it comes to their professional advisers. Many AIM businesses are taking the opportunity to review their adviser base and while Covid-19 has meant that many of the well-trailed audit reforms have been kicked somewhat into the long grass we would expect the market shake up to continue in the mid to long-term.”