AIM at 20: the highs, the lows, and the point

AIM was 20 years old last week. A “Multilateral Trading Facility” under MiFID, AIM is owned and operated by the London Stock Exchange in its capacity as a Recognised Investment Exchange. Whilst it has seen its fair share of corporate Icaruses, AIM is undoubtedly the most successful junior market in the world. Below we take a look back at AIM’s beginnings, triumphs and not-so-great moments.

The start and onwards

AIM was launched as a replacement to the Unlisted Securities Market on 19 June 1995. There were initially 10 companies admitted to trading, with an aggregate market capitalisation of £82 million.

(A company is not “listed” on AIM.  “Listed” refers to being on the “Official List” of companies whose securities are traded on a regulated market such as the London Stock Exchange’s Main Market. AIM is not a regulated market.)

The peak number of companies admitted to AIM was reached in 2007, when 1,694 companies were on the market with a combined market capitalisation of £97 billion. The financial crisis then dealt rather a blow to that figure, with the combined market cap shrinking to £37 billion in 2008.

Since 2012 the number of companies on AIM has been pretty stable, with 1,104 on the market in May 2015. Of those, 885 companies are UK-incorporated and 219 overseas incorporated. The present aggregate market capitalisation of all companies on AIM is £75 billion.

Survivors

None of the first 10 companies admitted to AIM in June 1995 is still on AIM. The only one that remains on the London markets is Athelney Trust, which is now on the Main Market with a £4 million market cap. Indeed, six of those first 10 companies moved to the Main Market. Of those six, one returned to AIM and the other four were taken over.

Interactive Investor has a good run down of what happened to those first 10 companies.

The company that has been on AIM the longest is Multimedia Corporation, which joined in July 1995 as the eighteenth company. Now called Tiso Blackstar SE, it is valued at £210 million.

More AIM statistics from the London Stock Exchange here.

Successes

Success is famously in the eye of the beholder, but here are some suggestions of companies that have prospered on AIM:

ASOS
GW Pharmaceuticals
Majestic Wine
James Halstead
Imperial Innovations
Mulberry
Fever-Tree
Patisserie Valerie

Not successes

It’s not really our place to list companies that didn’t do so well on AIM, but the introduction to this Independent article sets out some of those companies that the market would probably rather forget.

The point: risk capital

Companies have raised £92 billion on AIM since its inception. The not infrequent corporate shambles that enliven AIM are part of the deal; it is a growth market, where young companies raise risk capital. Approached in that light, the London Stock Exchange should be congratulated for succeeding where many other exchanges have failed: creating a vibrant junior market.