UK: Aim’s Global Reach

Last Updated: 31 October 2007
Article by John Cowie

John Cowie on Aim’s coming of age on the global stage.

Despite the best efforts of those across the pond to besmirch its reputation (see Quoted Business, June 2007), Aim has become something of an international star. Ironically, outside Europe, the US is home to the largest number of non-UK Aim companies with 75 as at September 2007. China follows closely behind with 54, though we sense that new admissions from the Far East will slow in coming months. Henry Tan of Nexia TS Public Accounting Corporation, our Nexia International firm based in Singapore, comments on this later in this issue.

Looking solely at the locations of Aim companies’ registered offices, one might think that there were 283 non-UK companies listed on Aim. But data from the London Stock Exchange shows that, in fact, well over 400 companies (from a total of 1,689) hail from overseas. This includes those whose primary place of operations is overseas, not merely their registered offices. That’s 25% of all Aim companies.

The rate at which Aim has attracted these businesses has accelerated rapidly. In the nine years to the end of 2004, a mere 154 overseas companies came to Aim. In the two and a half years since, more than 250 have listed. Aim really has come of age.

Overseas: Greater Risk?

Overseas companies have been largely responsible for pushing up the average value of companies on Aim. The main reason cited for this phenomenon is that investors in London, rightly or wrongly, perceive there to be a greater risk associated with a company whose operations are principally outside the UK. In order to mitigate the ‘overseas’ risk, they seek larger, more established businesses in which to invest.

A secondary factor is likely to be the cost of bringing a company to Aim. There are two elements to these costs: the (broadly) fixed-cost element comprising fees for the nominated adviser (Nomad), broker, reporting accountant, lawyer, PR firm, registrar and printer; and the variable element – the commission charged on funds raised. Fixed costs tend to be somewhat higher for overseas companies, with economies of scale playing a part in determining whether these costs remain acceptable in relation to the size of the company. The effect of an increase in fixed costs is to drive up the average size of companies paying them.

Reasons for the fixed-cost element being higher for overseas companies are many but, typically, a non-UK company will have to appoint lawyers to advise the company in both London and the non- UK jurisdiction, as well as lawyers to advise the Nomad and broker. It may also have to seek accounting advice and input both at home and in London, where the reporting accountant is likely to be based, and there may be foreign exchange issues to be dealt with. Furthermore, the fees charged by a Nomad may well exceed those charged for a similarly sized UK business to reflect logistical complexities – time zone differences, language – as well as a perception of higher risk and, potentially, more far-reaching due diligence requirements.

Split Opinions

So is this globalisation a good thing? Well, it depends on who you ask. There are those who believe that Aim served the SME better when it attracted smaller businesses. It has become undeniably harder for those with a shorter track record or a less proven product to find money on Aim. But Aim itself is a bigger, more successful market than ever before. Liquidity, measured by dealing volumes, is at an all-time high (Figure 3). Predictably, given Aim’s higher risk profile, the Aim All-Share Index has suffered more than the FTSE as a result of recent market jitters. It may well be that the gradual increase in average company size will lead to Aim becoming a more stable environment in which to invest. This, in turn, may allow the ‘next tier’ Plus Markets to carve for itself the niche which Aim used to occupy. Watch this space.

Where Are Aim Companies Coming From?

The growing internationalisation of Aim is amply demonstrated by Smith & Williamson’s increasing involvement in overseas Aim admissions, both as Nomad and reporting accountant. In the past year, we have acted as Nomad to eight non-UK companies on their admission to Aim – and the range of companies is illuminating.

Recently, we took Vycon, a flywheel energy storage system manufacturer headquartered in California, to Aim (profiled in Quoted Business, June 2007). Green Dragon Gas, a coal-bed methane business, was Aim’s largest-ever Chinese float in 2006. Speymill Deutsche Immobilien and Speymill Macau Property are property funds set up to invest in Germany and Macau, which we took to Aim, while the name Japan Residential Investment Company speaks for itself. Clean Energy Brazil is an investment fund putting money into renewable energy projects, PME African Infrastructure invests in projects in sub-Saharan Africa, and New Europe Property Investments intends to put money, initially, into Romanian commercial and residential property assets. In recent months, we have also acted as reporting accountant to AOI Medical (see back page) and Applied Intellectual Capital, both US-based.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions