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AIM's blistering pace in attracting new admissions and in achieving record fund-raising levels took a major pause for breath during the first quarter of this year, according to research by Grant Thornton Corporate Finance.
In the first three months of 2007, AIM has recorded 51 admissions so far* (with a further seven scheduled to happen tomorrow), while new funds raised have so far amounted to £1,017 million (with a further £129 million scheduled to be committed tomorrow).
In terms of admission levels, Q1 2007 ranks as the worst performance in three years (since Q1 2004, 53 admissions) and represents a drop of over 50% compared to this time last year (Q1 2006 - 121 admissions). In terms of fundraising levels, while raising over £1bn in three months remains a respectable result, it represents the worst performance in two years (since Q1 2005 - £370.3 million) and a 44% reduction on Q1 2006 (£2,052bn).
"AIM's success in recent years has got the City accustomed to record upon record and while this latest quarter's slowdown appears brusque, the pipeline of deals remains healthy with the next few weeks and months expected to deliver a performance more in line with AIM's usual standards", according to Philip Secrett, a partner at Grant Thornton Corporate Finance.
"The first quarter of the year always takes a while to get going. January and February have historically been quieter with most admissions completed in the pre-Christmas rush. This year's performance owes much to a quieter March which was affected by the ripple effects of the Asian markets tumble earlier in the month. Most companies on the brink of flotation then will have been wise to delay admission a few weeks, setting the expectation for a far busier April", continued Secrett.
"Among this quarter's issues, property and private equity funds (under the sub sectors of real estate and equity investment instruments) continued to be flavour of choice. While during 2006 around 50% of all new issue cash raised (£3.42bn by real estate companies and £1.67bn by equity investment instruments) was accounted for by this group, early 2007 saw that proportion rise to almost 70% (£791 million raised), leaving a larger proportion of 'traditional companies' to fight for investor interest and raise smaller amounts", concluded Philip Secrett.
