Top AIM stocks to watch in 2020
About AIM Advisers
AIM Advisers, Inc. helps small and medium-sized*, growth-oriented UK companies complete IPOs on the Alternative Investment Market (AIM) of the London Stock Exchange (LSE).
With a track record spanning 15 years as a consultant helping companies complete IPOs on London's AIM and as the Finance Director of an AIM-listed company, I have deep knowledge of London's AIM and extensive relationships in London, most notably with the 40 Nominated Advisers and 80 Nominated Brokers who act as the market’s primary gatekeepers.
Unlike a Main Market IPO, where there is a short list of similar investment banking firms, London AIM Nominated Advisers and London AIM Nominated Brokers are plentiful and do not form a homogenous group. Each Nominated Adviser and Nominated Broker tends to focus on certain sectors and on certain size companies where they have relevant connections within the London AIM investment community and equity research analysts to support an AIM IPO.
The main risk to a company is that the Nominated Broker is only able to raise a fraction of the targeted capital, leaving the company with the unpleasant decision of ‘taking what it can’ or aborting their AIM IPO after having spent a lot of time and money on due diligence. The decision to take your company public on London's AIM is likely the most important decision you will make since formation. AIM Advisers saves companies time, money and, crucially, derisks the process of an AIM IPO.
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* Generally market capitalisations ranging from £10 Million to £250 Million.
AIM is regulated by the London Stock Exchange (LSE) and is the most successful growth market in the world. Since London AIM's launch in 1995, 3,700 companies have listed on AIM, raising an aggregate of £100 Billion; £42 Billion in AIM IPOs and £58 Billion in AIM Secondary Offerings.
The largest institutional investors in London's AIM include; BlackRock, Invesco, J.P.
Morgan, Schroders, Legal & General, Aviva, Standard Life, Barclays, M&G and AXA.
The aggregate market capitalisation of the 1,000 companies currently listed on London's AIM is £81 Billion for an average market capitalisation of £81 Million with 61% falling between £10 million and £250 million. The most common reason an AIM listed company leaves the market is because it was acquired by a competitor, supplier or customer.
65% of the companies listed on London's AIM are British with the balance coming from overseas jurisdictions such as the U.S., China, Australia, Ireland, India, South Africa, Israel, Canada and Russia.
AIM’s regulatory model is moderate and balanced as opposed to the one-size-fits-all approach of the London Stock Exchange's Main Market.
AIM Advisers’ Approach
A preliminary determination of suitability for London's AIM is the first step. Too many UK companies embark on an AIM IPO at the behest of lawyers and accountants who hope the company will be deemed suitable by a Nominated Adviser and hope a Nominated Broker will be able to raise the desired capital. Their business models are driven by charging hourly fees and relying on cross-referrals with the Nominated Advisers and Nominated Brokers.
AIM Advisers’ business model is financially driven by successful outcomes (completed AIM IPOs) with a sharp focus on maintaining a positive reputation in London by introducing high-quality, very suitable UK companies to the most appropriate Nominated Advisers and Nominated Brokers. There is no incentive whatsoever for AIM Advisers to try to ‘fit square pegs into round holes’.
AIM Advisers does not receive referred work from the Nominated Advisers and Nominated Brokers but rather remains agnostic with respect to their selection. The most appropriate Nominated Advisers and Nominated Brokers for a UK company’s sector, size and aspirations, are the ones they will be introduced to, whether it is as few as four or as many as ten.
Upon successfully securing a Nominated Adviser and Nominated Broker, AIM Advisers’ provides a range of hands-on services to assist UK companies through an AIM IPO and in the aftermarket.
The timeline to an AIM IPO is six months. The first two months consist of optimally packaging up the company for London's AIM and arranging and attending meetings with the most suitable Nominated Advisers and Nominated Brokers. The third month entails ‘test marketing’ to a representative sample of London Institutional Investors, Private Client Brokers and High-Net-Worth Individuals. Months four and five are focused on the production of equity research reports and legal, operational and financial due diligence. The final month is spent on an AIM IPO roadshow and finalizing the listing documentation.