- Number of London Stock Exchange AIM IPOs and aggregate funds raised on London's AIM drop by 66% and 75%, respectively
- Decreases for ‘operating companies’ listing on London's AIM were less dramatic with both at 57%
- Average funds raised on London's for ‘operating companies’ listing on London's AIM holds firm at £21m
- 80% of IPOs on the London Stock Exchange's AIM in both half years raise between £3m and £100m
- First time since 2005 that majority of funds raised on London's AIM (55%) was for ‘operating companies’
- Substantial decrease in London AIM IPO dilution of existing shareholders of ‘operating companies’
H1 2007 – 36% H2 2007 – 32% H1 2008 – 24%
- Selective market but quality companies are listing on London's AIM and being rewarded with less dilution
- London's AIM shifting back to its original purpose of funding growth-oriented SMEs
- Outlook: 30 more IPOs on London's AIM in H2 2008 and a further shift towards ‘operating companies’ listing on London's AIM
The trend which began on the London Stock Exchange's AIM in 2006, and continued throughout
2007, of a significant number of Special Purpose Acquisition Corporations
(SPACs) and Investment and Real Estate Funds completing IPOs on London's AIM has come to
an end. During the first half of 2008,
only nine Investment Funds listed on the London Stock Exchange's AIM and there were no SPAC or Real Estate
Investment Fund IPOs on London's AIM. These ‘investment
vehicles’ listing on London's AIM cause the overall market metrics to be misleading.
The key takeaway from comparing the tables below is that
only 57% of listings on London's AIM during the first half of 2007 were for ‘operating
companies’ and those companies only captured 32% of the gross funds
raised on the London Stock Exchange's AIM. During the first half of 2008,
71% of the IPOs on London's AIM were for ‘operating companies’ and, for the first time since
2005, they captured a majority (55%) of the gross funds raised on the London Stock Exchange's AIM.
All Companies
|
Number of
London AIM IPOs
|
Gross Funds Raised
(in £ billions)
|
Average Funds
Raised
(in £ millions)
|
H1 2007
|
90
|
3.33
|
37
|
H1 2008
|
31
|
0.83
|
27
|
Exclusive of SPACs and Investment and Real Estate Funds:
‘Operating Companies’
|
Number of
London AIM IPOs
|
Gross Funds Raised
(in £ billions)
|
Average Funds
Raised
(in £ millions)
|
H1 2007
|
51
|
1.05
|
21
|
H1 2008
|
22
|
0.46
|
21
|
Notwithstanding the bifurcation of the London AIM IPO market between
‘investment vehicles’ and ‘operating companies’, 80% of the IPOs on the London Stock Exchange's AIM in each half
year raised between £3 and £100 million.
While London's AIM has certainly not been immune to the global
slowdown in IPOs, the codification of the AIM Nominated Advisers (Nomads) Rules in
early 2007 has increased the scrutiny of prospective companies listing on London's AIM by AIM Nominated Advisers (Nomads) since
the AIM Nominated Adviser (Nomad) vouches to the London Stock Exchange (LSE) as to a company’s suitability
for listing on London's AIM. Consequently, the
quality of the companies listing on London's AIM has increased and, as a result,
the London AIM IPO dilution of existing shareholders has decreased.
The outlook for the balance of 2008 is for another 30 London AIM IPOs
and a further shift towards ‘operating companies’ listing on the London Stock Exchange's AIM. The London AIM IPO market will continue to be cautious and
selective; focusing on more mature, higher quality ‘operating companies’ with
London AIM IPO fundraisings averaging around £20 million.
