Although the number of flotations in Q1 2006 were similar to last year, a total of 120 companies were admitted to AIM, compared to 130 in Q1 2005 (a decrease of 8%). In terms of funds raised, AIM's latest performance witnessed a massive 227% improvement on the same period last year with over £1.755bn raised in Q1 2006 compared to £536m in Q1 2005.
"Despite a substantial improvement in the amount of money raised, Q1's results were largely due to the fundraising performance of 14 investment entities raising in excess of £1.1bn", says Philip Secrett, a partner at Grant Thornton Corporate Finance. These included residential property company Puma Brandenberg, private equity fund London Asia Chinese, property investment group VinaLand and mining investor Platinum Diversified Mining.
"After breaking record after record last year, both in terms of new admissions and fundraising, AIM appears to be taking a small pause for breath - at least in volume terms. Much of the good work done over the past few years: improving the market's brand, attracting leading international companies and turning the market into the global exchange of choice for certain industries such as natural resources, are guaranteeing AIM the high value and high profile listings that 2006 has begun with", he continued.
Looking ahead, the Financial Services Authority's consultation paper (announced 31 March 2006), to relax the rules governing investment entities that want to list on the Official List and in particular attract a higher proportion of investment companies, is likely to create a more level playing field between the Official List and AIM.
Over the past 12 to 18 months, a number of substantial investment companies have been admitted to AIM. "Investment entities that would have previously remained private structures with limited liquidity and transparency have chosen AIM ahead of the Official List because of its flexibility and because of the vibrant fundraising environment that has grown up around AIM. With the Official List about to remove most of its restrictions in respect of investment entities, AIM can look to greater competition for listings, although it will continue to be the more flexible environment with a demonstrable track record of attracting significant funds", concluded Philip Secrett.
* up to and including 31 March 2006
