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IPOs in London

posted Oct 18, 2009, 9:51 AM by Yale ReiSoleil   [ updated Oct 18, 2009, 9:54 AM ]
In some ways, AIM (and a newer competitor, PLUS Markets) offers the best of all worlds. Not only is it disclosure-lite, but it’s funding-heavy, offering access to reasonably deep capital pools, in part because of AIM’s close relationship to venture capital trusts (VCTs). This relationship is no surprise – the goal of markets like AIM is to provide venture-like funding to emerging companies; who better to do that than actual venture capital pools specializing in investments of this sort on AIM? While the main market of the LSE offers certain advantages (such as an arguably unparalleled international investor base to tap into), there are greater costs and more stringent regulatory requirements.

VCTs have played a crucial role in the trading and liquidity of the AIM market, by facilitating investment in AIM companies. In fact, there is a category of VCT (aptly known as AIM VCT) whose primary focus is the AIM market (and the AIM companies associated with that market). AIM VCTs focus exclusively or predominantly on investing in AIM companies, with some further concentrating on certain industry sectors, such as natural resources, manufacturing and technology.

Companies listed on AIM see the AIM’s great strengths for what they are, offering low-cost, low-disclosure capital. AIM has proven particularly attractive to companies whose domestic equity capital markets are expensive and difficult to access.