London’s junior Aim market is on course to shrink by a fifth this year as it is ‘brutally knocked back’ by takeovers or other exits, figures show.
Data compiled by fund manager Aberdeen and broker Peel Hunt show 61 companies, worth a combined £12.3billion, have announced plans to leave Aim, amounting to 20 per cent of the market by value.
It is the latest blow to the City as London’s undervalued listed firms fall victim to foreign predators or up sticks and leave for overseas markets.
Aim’s predicament highlights the difficulties facing smaller listed companies in particular. Some of those exiting are moving to London’s main market.
The report said that ‘barely a week goes by’ without an announcement of a company making such a move.
A total of 89 companies left the junior exchange last year, with just 18 joining.
Exodus: Data compiled by fund manager Aberdeen and broker Peel Hunt show 61 firms, worth a combined £12.3bn, have announced plans to leave London’s junior AIM market
Examples of recent departures include North Sea energy firm Serica, which is moving to the main London stock exchange, and healthcare firm Alliance Pharma, which has been sold to asset management firm DBay Advisors.
Abby Glennie, co-manager of the Abrdn UK Smaller Companies Fund, said: ‘AIM was once a thriving market, but it has been brutally knocked back by outflows in recent times.
‘As a result, we’re seeing many of the biggest and best AIM companies moving to a main market listing.
‘It is a very ominous sign. Eventually we will be left with a tiny, illiquid market. That’s fine for small, individual investors but will make it very hard to get large-scale institutional money into the growth companies of tomorrow. In that scenario, we need to be asking: “How are we going to nurture the next generation of big UK companies?”’
Proposals to boost Aim were included in the recent Mansion House Accord, under which pension firms have been persuaded to allocate 5 per cent of their funds towards UK assets.
The agreement mainly covers private assets including real estate and infrastructure rather than publicly listed shares. But the latest version of the accord will now see shares listed on Aim or Aquis, a rival junior market, count towards the target.
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