PublicationsPrevious Page

The Alternative Investment Market - a victim of its own success?

The first of a two part look at the Growth of AIM by Keith Hatchick (II)

The press has recently begun to be more critical of AIM (see Daily Telegraph 2 June 1997), pointing out that the cost factor alone is not compatible with the LSE's wish to have a suitably regulated market to help safeguard investors while making it financially attractive to medium sized companies.

A number involved in the market do believe it should be possible to take a company to this market for in aggregate between £125 and £150k, a rate which in many cases would compare favourably with the cost of venture capital. The first admissions to the market were indeed less expensive. However information recently released by the LSE shows that there have been some issues for which advisers have required up to £1.5m. If the market is to survive it must he as an alternative to venture finance on the one hand and a full listing (or equivalent) on the other.

The success of the market is not just a matter of policing by the LSE and the nomads, but is also dependent upon responsible decisions and fees from all advisers.