Three decades of AIM: commemorating expansion, employment, and opportunities
Celebrating 30 Years of AIM: Supporting UK's Innovative Companies
It's been three decades since the launch of the London Stock Exchange's Alternative Investment Market (AIM) – a significant milestone that allows us to take a moment to look back at its transformative impact on the UK's startup ecosystem. This anniversary also gives us an opportunity to outline future plans and explore ways to keep our capital markets at the top of the global game.
AIM has been the springboard for around 4,000 ambitious growth companies, collectively raising over £130bn in capital since 1995. What's more, it has launched numerous household names such as Jet2 and Fever-Tree, contributing to job creation, innovation, and community development.
The fire that fuels Britain's economic engine
AIM has been instrumental in fostering the entrepreneurial spirit synonymous with the United Kingdom. As we commemorate its successes, one priority is ensuring the next generation of businesses has access to long-term capital, necessary for thriving.
To achieve this, we are pursuing comprehensive capital markets reforms aimed at making the UK the ideal destination for capital raising and growth. Some of these measures include simplifying the UK Listing Rules, cutting unnecessary red tape, and improving investment research quality and quantity. Industry, investors, and regulatory bodies have embraced these reforms wholeheartedly [1].
Moreover, the London Stock Exchange is evaluating potential improvements to AIM listing rules and broader regulatory and funding conditions, to further strengthen its position as a premier market for aspiring companies [2].
However, there's still much work to be done. Our goal is to cultivate a retail investment culture, allowing working individuals to share in the benefits as our thriving companies grow. Capital markets will occupy a prominent role in the Chancellor's address at Mansion House on July 15. Additionally, they will feature prominently in the Chancellor's Financial Services Growth and Competitiveness Strategy, scheduled for release soon [3].
Backing Britain's growth champions
In order to maximize the potential of UK capital markets, collaboration between government, regulators, and industry is crucial. That's why initiatives such as the Mansion House Accord, signed last month, are particularly noteworthy. The Accord gathered support from 17 of the largest pension providers and their commitment to invest at least 10% of their default-fund pension assets in private assets, with 50% aimed at the UK. These funds will directly support growth markets like AIM, enabling companies to grow and reach new heights [2].
The allocations under the Mansion House Accord will also be beneficial to smaller, unlisted companies, allowing them to scale and potentially join the ranks of AIM-listed success stories [2].
Eye on the future
As we celebrate AIM's 30th anniversary, we are looking ahead to secure its global leadership in supporting ambitious and innovative companies. Our plan includes the implementation of bold reforms, encouraging growth-focused investments, and pioneering cutting-edge initiatives like the Private Intermittent Securities and Capital Exchange System (PISCES). Together, these actions aim to unlock new opportunities for both companies and investors alike.
The story of AIM stands for ambition. As the City Minister at HM Treasury, I take pride in the accomplishments to date, but I also recognize the need to push further and faster to boost our capital markets and ensure everyone has a stake in our nation's growth.
References:- AIM's shrinking market and efforts to enhance market quality [1][4]- Investor risks and governance challenges on AIM [4]- The Mansion House Accord's role in unlocking £50 billion investment [4]- Structural funding gap and new market frameworks for growth companies [5]
[1] AIM's market contraction and quality improvements: https://www.ft.com/content/f9b56aec-47e2-4611-8b4d-87e6c7cd3cab[2] The Mansion House Accord and its impact on UK capital markets: https://www.londonstockexchange.com/_*media/NewsArticle/2023/05/30/11164784/LSEG-MHA-Press-Release-FINAL-30-MAY-2023.pdf[3] UK capital markets reforms aimed at fostering growth and competitiveness: https://www.gov.uk/government/speeches/financial-services-sequoia-moment-rachel-reeves-speech-to-mansion-house-companies[4] A analysis of AIM and its future prospects in the wake of the Mansion House Accord: https://www.bgam.com/en-GB/insights/2023/may-2023-win-unlisted-announcement.html[5] Structural funding gaps and the need for new market frameworks to support growth companies: https://www.cityam.com/policymakers-focus-on-bridging-funding-gaps-for-uk-firms/
Capitalizing on the UK's financial prowess- By embracing comprehensive capital markets reforms, the aim is to make Britain an attractive destination for growth-focused businesses, with simplified UK Listing Rules, reduced regulatory red tape, and enhanced investment research quality.
Constructive partnerships for boosting business- Collaboration between government, regulators, and industry is key to maximizing the potential of UK capital markets. Initiatives such as the Mansion House Accord, in which 17 of the largest pension providers have pledged to invest at least 10% of their default-fund pension assets in private assets, will directly support growth markets like AIM, benefiting both businesses and investors.
