Companies are stunned by the mounting costs of AIM

ALTERNATIVE INVESTMENT MARKET: rocketing fees hit floats

Almost a third of companies which float on the Alternative Investment Market (AIM) find the costs involved far greater than expected, according to new research.

Fewer than half (47%) of companies which were aware of AIM expected to pay less than 200,000 in fees for admission to the market, according to the 'Taking AIM 2001' survey of 200 potential AIM companies carried out by City law firm Hobson Audley and accountants Baker Tilly.

However, a rude awakening is not far off, as the average costs of admission with funding in 2001 were 580,000, with 30% in excess of 600,000.

Of the 50 recent entrants to AIM also questioned in the survey, 31% reported that the actual costs were greater than expected, and cited legal, advisory and broker fees as the overruns.

Elsewhere in the survey, 91% of AIM-listed companies said 'speed of response' was the most important quality looked for when appointing a new corporate finance lawyer.

Companies which were not on AIM rated this lower down the scale, at only fourth most important.

They viewed the quality of the team as the most important attribute, followed by an understanding of the company's business needs.

Hobson Audley's head of corporate Max Audley said: 'Companies which waste time waiting for their legal advisers to get back to them are incurring hidden management costs.

They do not always fully appreciate this until they get involved with AIM, which would explain the disparity of responses.'

Most companies were 'very pleased' to have joined AIM.

Victoria MacCallum