FUNDS: Alternative Investment Market attracts more US companies and international listings



The Alternative Investment Market (AIM) is heading for another record-breaking year, with the funds raised on London's junior stock exchange set to eclipse last year's figure despite there being fewer admissions - and corporate finance lawyers have predicted the trend will continue despite volatile global markets.



At the half-way point in the year, almost £8.6 billion had already been raised from 236 flotations on AIM, compared with £8.9 billion raised on a total of 519 flotations in the whole of 2005. Some 63 admissions have been of international companies - pro rata, this is similar to the 120 overseas floats last year.



The first half of this year saw the largest listing to date on AIM, with Bermuda-based company Infinity Bio-Energy raising £272 million to pursue acquisitions in the ethanol refining sectors. The largest flotation this year of a domestic company was that of real estate company Trinity Capital, which raised £250 million.



Hugh Maule, corporate partner at London firm Lawrence Graham, said: 'In terms of the number of admissions, I don't think it will be possible to beat last year - that saw the market at its zenith.'



But he suggested that the trend towards more substantial companies raising larger amounts and more international listings will continue.



Ashley Reeback, a partner and head of the AIM team at London-based law firm Finers Stephens Innocent, said AIM has become more attractive to US companies after the introduction of a much stricter regulatory regime following the Sarbanes-Oxley legislation in the US. 'The profile of AIM has been raised due to the record listings last year, which has made foreign companies more interested in coming to the London market.'



Richard Hildebrand, corporate partner at City firm Trowers & Hamlins, added: 'Previously, the international companies seeking to get listed on AIM were mainly from Commonwealth countries, but we are now seeing a broadening out of the international companies being floated, including from emerging markets like China.'



However, Mr Reeback warned that global markets are difficult at the moment and that 'it could be a bumpy ride over the summer and in the third quarter of the year'. He predicted a more volatile global stock market would lead to fewer flotations and lower valuations for those that end up being listed, which could lead to a greater risk that more deals will become abortive transactions.



Mr Hildebrand was less pessimistic about the second half of the year, and said: 'The general trend will still be upward for the rest of the year, but some transactions may be put on hold due to global political instability.'



Catherine Baksi