As AIM turns 30 this week I’ve been reflecting on the 5 IPOs I’ve done on the market since 2012.
My view is that AIM is one of the best public markets in the world for small, fast-growing companies. It was specifically designed to help smaller and early stage companies to access capital.
In the past three decades, AIM has contributed £68 billion to the UK economy, with £5.4 billion in corporation tax payments. It has helped 4,000+ companies raise nearly £135 billion, with £87 billion raised through further issues.
AIM was never designed to be a market to tuck away shares and forget about them. It is the growth market and as such we all invest in the AIM market to get above average return on investment. As such there will always be exceptionally high growth but there will also be failures – because AIM is not designed to be a long-term investment. It was designed for companies to grow fast and graduate to the main board of the stock exchange or get acquired within a 3-5 year window.
Therefore, when you invest in AIM stocks you do need to monitor them and when you do see an above average return it’s always wise to bank some of those profits. This is different to investing in much bigger stocks on the main market such as FTSE 100 stocks, when you can tuck away your investment and keep adding to them every year in the safe knowledge that over a longer period of time, you’ll make a very reasonable return on your investment in the region of 10% per annum. But people invest in AIM to get many multiples of 10% per annum and as such, no investor should put all his portfolio into AIM stocks. But investing in AIM in conjunction with a well-balanced portfolio of other stocks can be a very productive investment strategy.
For example, some of the best investments I made in my life have been in AIM companies. I and most shareholders got quite a number of times our original investment back for investing in Amryt Pharma plc and also Open Orphan plc. Furthermore, two other fantastic examples of successful AIM companies are Touchstone Exploration plc, which Shore Capital listed on AIM in 2017 and by 2021 it was up almost 20X. RockRose Energy plc listed in 2016 at 50p per share and three years later it was acquired for £18.50 per share giving almost a 30X return. Cavendish IPO’d Amcomri Group plc last December at 55p and today it’s at c. 95p, giving a 70% plus in just over six months.
I’m very optimistic for a resurgence of growth and interest in London and in particular the AIM market. I believe there’s a bright future for AIM in the months and years ahead.
