AIM is set to match the total amount of new money raised in 2005 (£6.4bn) after just nine months of the year, thus setting the prospect for 2006 becoming yet another record breaking year in terms of funds raised, according to research by Grant Thornton Corporate Finance.
For the year to date* AIM has raised a total of £6.3bn with further £40m expected to be raised before the end of the month. This milestone comes despite a quieter summer when a total of £1.29m was raised during Q3, just over half of the funds raised in the record breaking previous quarter (£2.95bn) but broadly in line with the corresponding quarter last year (£1.26bn).
In terms of admission levels, for Q3 to date*, 88 companies have joined AIM with a further 8 companies currently due for admission before the end of the quarter. The number of admissions is however down both on the previous quarter (115) and compared to this time last year (112). Interestingly for the year to date, international companies have accounted for the highest proportion of all admissions (37%) since the market was first launched (30% in 2005; 21% in 2004).
"2006 has already seen AIM break the £20bn barrier of new money and of £33bn in total funds raised (includes further money) since its launch. Not only has the market already matched 2005 in terms of new money raised at admission but has also seen almost a 60% increase in the amounts of further money raised (over £4bn) by existing AIM companies compared to last year. What this points to is a dynamic market which is growing in popularity and continuing to attract more international companies" says Philip Secrett, partner at Grant Thornton Corporate Finance.
"Behind the headlines, the key phenomenon that is generating such high fundraising levels is the continued appeal of the market for speciality and property funds, which are raising the lion's share of the money, and in 2006 so far have accounted for some 44% of all money raised (in excess of £2.7bn)", continued Secrett.
Looking ahead, Secrett predicts: "Quite clearly 2006 will prove yet another record breaking year in terms of funds raised, but probably lag behind last year in terms of admission numbers - currently about a quarter fewer on a like for like basis after three quarters. The prevalence of speciality and property funds and the continued appetite for mining, oil and gas issuers has supported the increasing levels of new funds raised, albeit the larger average raise for such companies had resulted in a declining overall number of AIM admissions. While the pipeline of deals is looking healthy for the short-term, longer term the market will need to address a range of issues and in particular its over-reliance on sectors such as mining and oil and gas, which at present account for almost 50% of AIM by market value", he concluded.
