190 take AIM in a year

ABOUT 190 companies have been listed on the alternative investment market (AIM) since its inception 13 months ago.

AIM is a successor to the unlisted securities market (USM) and is designed to give smaller companies greater access to capital to help build their businesses.

Corporate finance partner Paul Cooper at Bristol firm Bevan Ashford said AIM has been a tremendous success.

"It has seen its market capitalisation grow from £52 million to £3.4 billion, raising £350 million along the way," he said.

Companies seeking an AIM listing are not burdened by the USM requirement of having to demonstrate a two-year financial record. Nor is the cost of entry as high as for a full stock market quote.

The result is that start-up operations can find the money to expand their companies rather than rely on the goodwill of banks. This is an important development for embryonic British groups. Traditionally, they have found funding more difficult than their US counterparts, where the enterprise culture has firmer roots.

On the other hand, some commentators have worried that the easier entry requirements for AIM companies could lead to an upswing in corporate failures.

But Paul Cooper at Bevan Ashford disagrees. He said: "The key to AIM's success is the system of nominated advisers that appears to have deterred the corporate cowboys feared by the critics.

"Each company has to secure the backing of one of 58 advisers from a list vetted by the Stock Exchange."

This is obviously no guarantee that companies are not going to go belly up. Moreover, AIM has been lucky in that its introduction has coincided with a bull market.