Businesses Continue to Flee
More departures from London’s AIM market in 2025 Bankers and advisers told this to Reuters. Despite attempts to rejuvenate UK capital markets, companies are decamping. Alliance Pharma is putting itself up for sale. It will be acquired by DBAY Advisors. There were offers to take over Team Internet. These were proposals from private equity firms.
The Original Purpose Behind AIM and Its Current Enforcement Struggles
Such a 30-year-old market helped smaller companies. It provided simpler listing rules than the main market. Now more AIM members are considering delisting. They also explore sales. Valuations in the markets have fallen. Changes in tax rules have made listings less appealing.
Reasons for Delistings
Marc Jones at Peel Hunt sees increasing interest in sales. Boards weigh private versus public sales. After a while, the bigger AIM firms think of listing on the main market. This transition allows for enhanced liquidity. Last year, British officials amended listing rules. They were intended to compete with New York and the EU. These reforms have not led to an increase in IPOs. Funds in the UK have long been in outflows.
Our Decline in Numbers
Last year 89 companies departed AIM. Only eighteen joined. In 2021, just fifty-four left. Sixty-six new firms entered then. A third of AIM firms are seen as being vulnerable to bids, according to Peel Hunt. These companies are worth 50 to 250 million pounds.
Consequences and Root Causes
AIM stocks are trading below their 10-year average. This discount is 30% to 40%. Markets on the FTSE 100 and 250 are at smaller discounts. Graham Simpson of Quest Research describes AIM’s potential extinction as “catastrophic.” They say it’s a sign of backing away from UK entrepreneurs. He attributes this to outflows from UK funds. Another reason he cites is apathy towards small UK companies.
Impact on Financial and Economic Opportunities
There have been 41 consecutive months of outflows from UK equity funds. This drives AIM departures. That’s what Bidhi Bhoma of Panmure Liberum writes. He also cites a dearth of opposing IPOs. Bhoma emphasizes the economic significance of AIM. It generates jobs and tax revenues.
Changes to Taxes and Possible Ways to Fix It
A newer trigger is the snapped inheritance tax relief. Business owners with AIM enjoyed a complete exemption. “It [the deficit] was halved by the finance minister Rachel Reeves.” Investors now face a 20% tax. Bhoma recommends requiring pension plans to non-exclusively allocate UK assets. Back in (British) stocks? Simpson says UK tax-free savings accounts should be restored.
Challenges in the Wider Market and Future Outlook
The primary exchange also has its own struggles. IPOs have decreased. Last year saw a number of big take-private transactions. Companies shifts listings to US This is in the interest of better valuations. Analysts see a turnaround in European flows. This could help London. Bhoma– Fix the UK capital problem This, in turn, will lead to better IPO appetite.
