Alternative Investment Market (AIM)
What Is the Alternative Investment Market (AIM)?
The Alternative Investment Market (AIM) is a sub-market of the London Stock Exchange (LSE) that is intended to assist smaller companies with accessing capital from the public market. AIM permits these companies to raise capital by listing on a public exchange with a lot greater regulatory flexibility compared to the principal LSE stock market.
Understanding the Alternative Investment Market (AIM)
AIM opened its entryways in 1995 to 10 companies with a combined market capitalization of about \u00a382 million ($116 million). From that point forward, it has assisted in excess of 3,865 companies with raising more than \u00a3115 billion ($163 billion) and, as per the LSE, is presently home to roughly 850 companies with a combined market cap of \u00a3104 billion ($147 billion).
The FTSE Group keeps three real-time indexes for tracking AIM: the FTSE AIM UK 50 Index, the FTSE AIM 100 Index, and the FTSE AIM All-Share Index.
Companies seeking to do a initial public offering (IPO) and rundown on AIM are generally small companies that have exhausted their access to private capital however are not at the level required to go through an IPO and rundown on a large exchange. In spite of the fact that AIM is as yet alluded to as the Alternative Investment Market, or London's Alternative Investment Market in the financial press, the LSE has made a practice of alluding to it by its abbreviation as it were.
AIM and the Nomads
The interaction for a company listing on AIM follows a lot of a similar path as a traditional IPO, just with less tough requirements. There is as yet a pre-IPO marketing rush, with historical financial information to stir up interest, and a post-IPO lock up, for instance.
One key difference is the job nominee advisors, normally known as nomads, play all the while. These wanderers are viewed as the regulatory system for AIM and are entrusted with prompting the companies pre-IPO and later.
One issue that is habitually raised about this relationship is the way that travelers are responsible for guaranteeing regulatory compliance, however they additionally profit as fees from the companies they rundown and keep on directing as part of the listing agreement.
AIM's Reputation as a Less-Regulated Market
AIM is viewed as a more speculative investment forum due to its casual regulations compared to larger exchanges. The regulation for companies listed on AIM is frequently alluded to as being light-contact regulation, as it is basically a self-directed market where wanderers are entrusted with complying with the broad rules.
There have been instances of travelers neglecting to perform their responsibilities, in a manner of speaking, and AIM is certainly not an alien to outright extortion — to be fair, no major exchange is by the same token. Subsequently, AIM will in general draw in sophisticated and institutional investors who have the risk craving and resources to perform independent due diligence.
AIM has been condemned for being a financial wild west where companies with problematic ethics go for money. This analysis has held up at times, particularly with extraction companies operating in devastated areas of the world. Notwithstanding, AIM has likewise shown the value of having a gap market where eager for risk investors can assist with speeding up cash-starved companies along their growth path, helping the company, its investors, and the economy as a whole.
- Since sending off in 1995, AIM has assisted in excess of 3,865 companies with raising more than \u00a3115 billion ($163 billion).
- The companies listed on AIM will quite often be smaller and all the more profoundly speculative in nature, in part due to AIM's casual regulations and listing requirements.
- The Alternative Investment Market (AIM) is a particular unit of the London Stock Exchange (LSE) taking special care of smaller, more risky companies.