Taking AIM - Annual Survey 2010

Download a copy of the Taking AIM Annual Survey 2010.

Culling the weak, keeping the strong, coming of age

This week sees the publication of the fourteenth annual Taking AIM survey published by Faegre & Benson in partnership with Baker Tilly accountants. Although 2009 was a year of continued economic hardship and investor caution, a significant delisting of many of its smallest companies saw AIM end the year a stronger, but significantly streamlined, entity. Indeed, with the benefit of hindsight, we may ultimately come to regard 2009 as the year that AIM came of age, showing its ability less for the volume of its IPOs, and more for its continued support of existing quoted companies.

The contrast between the size of AIM's membership and its strength may be summarised in two statistics. Whilst the AIM population at 31 December 2009 was below 1,300 for the first time since August 2005, the average market value of an AIM company at that date stood at £44 million, compared with only £24 million at the end of 2008.

The attrition rate was not, in fact, significantly higher than in the previous year (293 delistings in 2009, compared with 259 in 2008), but, with investors naturally keener on more proven secondary stocks, rather than untested start-ups, only 13 companies joined the market by IPO. The good news is that AIM has revealed itself to be a market of maturity and strength, not to mention durability, and one with a role to play for companies advancing beyond their infancy and seeking to develop further. The most substantive proof of this is that secondary fund raisings increased from £3.2 billion in 2008 to £4.8 billion in 2009.

Now that the dust has settled on 2009, one can see that AIM's aggregate membership is undoubtedly of a higher quality than before. This can only be good news for the market and its reputation as it looks towards the future.

Melanie Wadsworth, a corporate partner in our London office, welcomed the findings: "I am delighted to see the results of this year's survey confirm that AIM has weathered the economic storm to emerge stronger than ever. By providing access to capital for its existing companies when times were tough, and other funding options were few and far between, AIM has come of age and proved that it is more than just an IPO market. The contribution of SMEs to the economy should not be underestimated; helping smaller, dynamic companies to realise their growth and innovation potential will be key to kick-starting economic recovery in the UK and AIM has an important role to play in that".