Article16 Aug 2018 11:52
Off topic but a good article in the times today about the challenges of life on the alternative market. Views are not my etc etc so don't shoot the messenger and all that..
"One reason for listing on Aim is to attract institutional capital but increasingly those funds are raising their minimum market capitalisation requirements to £50 million and in many cases £100 million. Less than 25 per cent of Aim is valued at more than £100 million, meaning that 75 per cent falls beneath the radar of most institutional investors.
Increasingly, it is falling on the private investor to take up the slack but, even here, the regulatory hurdle for participation is increasing. Unless you are a private client with the highest attitude and affordability for risk, it is unlikely investing here will be considered suitable for you.
The net result is a growing void of investors for this market, often reflected in herd-like short-term momentum for share prices, followed by long periods in the wilderness. Most companies complain that they struggle to find quality longer-term investors and sensible valuations and find the whole exercise unsatisfactory.
Where the situation can become particularly difficult is for companies valued at less than £10 million — a quarter of the companies listed on Aim. The additional overhead required to list, which includes appointing a Nomad and hiring specialist accountants, lawyers, PRs and non-executive directors, can easily run to £200,000 a year. Given the size of these businesses, it is unlikely that many are making sufficient money to justify these costs."
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