The total amount of capital raised on the Alternative Investment Market (AIM) so far this year looks set to fall short of the £5.5bn raised in 2018.
In the year ending in September, £3.9bn of capital was raised on AIM in company floats and secondary fundraising, according to accountancy firm UHY Hacker Young.
In calendar year 2018, £5.5bn was raised on AIM in total – £1.56bn in initial public offerings (IPOs) and £3.94m in further issuance.
However, UHY Hacker Young points out that this year’s £3.9bn so far accounted for 62pc of all capital raised on European growth markets last year.
The £3.9bn with just £1.9bn raised between the next four biggest growth markets such as Sweden’s FN Stockholm (£1.1bn), Madrid Alternative (£325m), AIM Italia (£234m) and Frankfurt Scale (£234m).
AIM is on track for the lowest number of initial public offerings (IPOs) in its history this year. Only 20 companies have floated so far compared with 65 last year and a high of 519 in 2005, according to London Stock Exchange data.
>See also: Q&A with AIM CEO Marcus Stuttard
At the end of September, there were 882 companies listed on AIM – a fall of 41 so far this year – compared with a peak of 1,694 in 2007.
AIM is still seen as the most suitable market for smaller, fast-growth companies likely to raise more money in capital markets further down the line.
Brexit uncertainty and a slowing global economy, as well as the US-China trade war have all been factors contributing to headwinds affecting AIM.
Another factor is the amount of cash readily available to private equity, helping keep companies private. Private equity has an estimated $3tr to invest.
“They [private equity firms] have got a huge amount of dry powder and are paying higher multiples than the listed markets,” Ross Mitchinson, co-chief executive of stockbroker Numis told The Times.
Further reading on AIM