Press release featured in City AM.
The AIM market is recovering from its “annus horribilis” for IPOs (initial public offerings - new listings). Money raised through AIM IPOs more than doubled in the last year to £119.6m (year-end December 20 2024), up from just £48.5m raised in the previous year.
However, the recovery is still tentative with the actual number of IPOs on AIM at 11 the lowest level since the financial crisis (2008/09) when there were 13 IPOs. The were also 11 IPOs recorded in the previous year (2022/23).
The amount of money raised from AIM IPOs in the last year, is just 2% of the £6.6bn raised during AIM’s IPO peak in 2006/7.
The appetite for AIM IPOs took a hit from the recent Budget that reduced the IHT relief attached to investing in AIM shares, reducing the attractiveness of AIM shares amongst some private investors.
Colin Wright, UHY UK Group Chairman, says: “With the AIM market seeing such fierce competition from the US markets for IPOs it seemed an odd time to increase the tax take on AIM shares.”
Colin says that to further boost the attractions of the AIM market further reforms of the AIM market should be considered – both to lower the cost of listing on AIM and to lower the regulatory burden of companies on AIM.
That need to lower the regulatory burden on AIM companies has been increased by the growth of the Private Equity industry in the last 15 years. Investment by PE funds is now seen as attractive alternative to listing by an increasing number of UK companies.
Says Colin: “There is excessive red tape and reporting obligations on AIM that smaller companies can simply avoid by remaining private.”
“If AIM is to remain competitive with private equity and other junior markets, there needs to be a more open discussion for on how we can reduce red tape for AIM companies. Most commentators agree that an active stock market for smaller companies is an essential part of a growth economy.”
