Aim: 20 trying years - FT
18 Jun 2015
The London small company market has always split opinion
A wild west casino that parts fools from their money. Or, a successful way for small, growing companies to find funding. London’s Alternative Investment Market, which turns 20 on Friday, has always split opinion. It has produced more than its fair share of disasters, but there have also been successes — small company markets will always involve both. Overall though, its record is dispiriting. Between 1996 and 2014 the FTSE Aim All-share lost an average of 1.6 per cent a year. By contrast the Numis Small Companies Index — the bottom tenth of main market shares — rose an average of 8.9 per cent.
Yet Aim thrives. Last year there were 118 new admissions to the market, raising a total of £2.6bn (more than double the previous year), while £3.3bn was raised in secondary issues. Somebody is making money on Aim. Given how tough it is for the gold diggers, perhaps the best strategy is to target the shovel makers — the brokers who work for Aim companies. Many of them, including Numis, Cenkos, Panmure Gordon and WH Ireland, are themselves traded on Aim. And they are doing well — over the past three years shares in all of those brokers have outperformed the Aim All-share.