Alternative Investment Market

The Alternative Investment Market, or AIM, is a special part of the London Stock Exchange. It started on 19 June 1995 to replace an older market called the Unlisted Securities Market (USM). AIM was created for smaller companies or those that need simpler rules to sell their shares.

When it began, AIM had just 10 companies worth about £82.2 million together. By May 2021, it had grown to include 821 companies, each worth around £80 million on average. Many companies from other countries also joined AIM because it has fewer complicated rules, especially compared to laws in the United States.

The FTSE Group keeps track of AIM companies using three special lists: the FTSE AIM UK 50 Index, FTSE AIM 100 Index, and FTSE AIM All-Share Index. These help people see how well these companies are doing over time.

Regulatory model

AIM is a special part of an exchange with flexible rules for companies that want to share their stocks. Companies can either follow these rules or explain why they choose not to.

To help companies follow the rules, each company must work with a special helper called a Nominated Adviser, or Nomad. This helper gives advice and makes sure the company follows the rules in a way that works best for them. The Nomad is very important in AIM’s way of doing things.

AIM does not have many strict rules like other markets. This means companies can join with fewer requirements and follow simpler rules after they join. However, this also means that some big investors might try to take advantage of these companies. Companies on AIM still need to follow the rules of their own country and prepare yearly reports.

AIM is popular with big investors and wealthy individuals because the companies there are smaller and can be riskier. This can be tricky for investors who are not very experienced.

Market capitalisation

The following table lists the 10 biggest AIM companies on 31 May 2021.

Companies

The following table lists the top 100 AIM companies by market size on 25 April 2020.

Criticism

In 2007, a U.S. official compared AIM’s share trading rules to a casino, saying many companies leave the market quickly. However, the London Stock Exchange, which runs AIM, said that very few companies actually close down each year.

AIM faced issues when a company named Langbar International was found to have lied about its assets. In 2011, its former leader was punished for making false statements about the company’s money. This led to changes in AIM’s rules to better check companies before they join.

Trends

In March 2007, a newspaper noticed that many companies joining AIM came from places outside the UK before they started trading there. About 35% of the companies that joined AIM in 2006 were from special areas known as offshore financial centres, mostly from the Channel Islands or the British Virgin Islands.

In January 2009, it was announced that AIM would help create a new market in Asia called 'Tokyo AIM'. This new market would use the same rules as AIM and be a partnership between the Tokyo Stock Exchange and the London Stock Exchange. In July 2012, Tokyo AIM changed its name to TOKYO PRO Market, but it still used the original ideas from AIM.

Dividends

As of October 1, 2018, about one-third of the companies listed on AIM had paid money to their shareholders in the past year. Some of the bigger companies that paid dividends include Fevertree Drinks PLC (FEVR), Burford Capital Ltd (BUR), and Abcam PLC (ABC). Some of the smaller companies that paid dividends include Holders Technology PLC (HDT), Aeorema Communications PLC (AEO), and Stilo International (STL).