Companies hit £100bn on AIM

As markets worldwide experienced a challenging 2016, AIM, again demonstrated its enduring ability to support high growth businesses access capital and engage private investors.

Now in its 22nd year, AIM has already reached a significant milestone in the first weeks of 2017: companies have now raised more than £100bn on the market.

It continues to be a tremendous success story for Britain, boosting access to equity finance for thousands of growth businesses, those that continue to be central to innovating and creating new jobs across the UK.

AIM steered through 2016’s financial market headwinds. As well as 38 new public offerings which raised a total of £1.1bn, AIM allowed 263 companies already listed on the market to raise £3.8bn in further fundraising.

Household names from across the country such as fashion retailer, Joules and chocolatier, Hotel Chocolat, floated alongside cutting edge software creators such as Blue Prism and Yorkshire-based financial services firm, Morses Club. Remarkably AIM’s 38 IPOs ended 2016 up more than 39 per cent on average.

The success of companies floated on AIM in 2016 builds on the similarly strong price performance of IPOs on the market over the last three years, up 16 per cent on average. The last three years have also seen the nature of new AIM companies evolve, allowing the market to become an IPO venue for more developed, as well as younger, fast growing companies.

Compared to 10 years ago, the average new AIM company is four times bigger and raising six times more capital.

But we recognise that it’s not only about the bottom line and broadening access to the capital markets must create opportunities for everyone: investors, the companies themselves, and the economy as a whole through good jobs and economic growth.

We hope that in 2017 more steps can be taken to make it easier for private investors to access our markets. That’s why together with a number of financial market participants, including Redmayne Bentley, a recent contributor to this newspaper on the same topic, we continue to call on the

Government to facilitate greater private investor participation in IPOs, which so galvanised individuals to take part in the wave of privatisations of the 1980s.

The Government recognises the enormous possibilities in this area, highlighted by the strong private investor uptake in Royal Mail’s IPO in 2013. But instead of being the preserve of large Government privatisations, this opportunity should be the norm for almost all new companies floating on London Stock Exchange.

A number of innovative and nimble alternative finance providers are also tapping into this demand. Last year, UK crowdfunding platform, Syndicate Room, became the first crowdfunding platform to join London Stock Exchange, its new intermediary status enabling crowdfunding investors to participate in IPOs and placings on London Stock Exchange.

We successfully called for AIM shares to be eligible for ISAs and for the abolition of Stamp Duty on AIM company shares in 2014. ISAs are now effective savings vehicles, benefitting from increased limits and inheritance tax changes. They could become genuinely tax free if Stamp Duty was also abolished for private investors holding Stocks and Shares ISAs.

Innovation is driving change but we must continue to work together, as more can be done to increase opportunities, build trust in the capital markets, and keep the UK’s global financial markets thriving.

2017 is now the right time to continue making every effort to connect the capital markets and brilliant UK companies to the millions of savers and investors across Britain.