"In terms of funds raised the market has entered fifth gear, with additional momentum coming from speciality and property funds raising significant amounts of new money, which in 2006 have to date accounted for 46% of new money raised this year (in excess of £2bn)", says Philip Secrett, partner at Grant Thornton Corporate Finance.
During Q2 2006* over £2.85bn was raised, bringing the total for the year so far to over £4.9bn, more than double the amount achieved in the same period last year (£2.1bn). In terms of IPOs a total of 101 companies were admitted to AIM during Q2*, a drop compared to the same period last year when 147 companies achieved a listing. However, a further 18 issues (potentially raising around £300m) are expected before the end of the quarter.
"What we are currently seeing is the participation of AIM in a broader European trend for private equity and property funds raising permanent capital through public markets which offer the additional advantages of transparency and liquidity. Not only does AIM offer a flexible and liquid environment but also the opportunity of a quicker fundraising process as compared to the creation of a private fund", said Secrett.
"The trend is allowing investors direct access to traditionally rigid and illiquid investment opportunities in private equity and property funds which until now were largely the preserve of institutional investors and hedge funds."
Looking ahead, Secrett predicts for the trend to continue. "While the expectation is undoubtedly for a greater number of such companies to come to AIM, it is likely that for their current popularity to be matched by equally popular returns, investors will need to wait. Putting large amounts of raised capital to work in order to get strong returns will inevitably take some time. The big question rests on the amount of patience investors will wish to lend", he concluded.
