AIM rebound7 May 2025 22:23
Stark contraction
AIM’s contraction has been stark. At its peak, the index hosted nearly 1,700 companies; today, just 586 remain. Yet this “survivor cohort” now reflects a stronger mix of businesses with clearer paths to profitability and growth.
The current market climate, Turner Pope says, is increasingly favourable to companies with innovative solutions, particularly in sectors like life sciences, clean tech and digital infrastructure, many of which are well represented on AIM.
Political support could also help drive a turnaround. The Labour party is reportedly exploring reforms to pensions and ISAs that would direct capital into unlisted and small-cap stocks, with an eye on replicating Canada’s large-scale pension investment model.
Meanwhile, initiatives like the Mansion House Compact, which encourages major UK pension schemes to allocate 5% of their assets to private equity and early-stage companies, could bring much-needed liquidity back into the market.
M&A to pick up
M&A activity is also likely to pick up. Turner Pope points to research from Peel Hunt suggesting that up to a third of AIM-listed companies valued below £250 million are vulnerable to takeover approaches, given current depressed valuations.
The average bid premium for AIM takeovers in 2024 was 66%, highlighting the scale of the disconnect between market value and perceived business worth.