On June 20, 2006, Paul Gray of Investec Investment Banking, gave a talk in East Palo Alto, CA on the advantages of the AIM market as compared to the NASDAQ.
AIM recently turned 11 years old. AIM has been experiencing rapid expansion in terms of the number of companies listed, and access to emerging markets such as China. As of May 31, 2006, the average market capitalization for an AIM company was $95 million versus $1.2 billion on NASDAQ.
Benefits of AIM include liquidity. The cost of capital in London is less than in US exchanges. Acquisition rules also facilitate growth. Many companies list both in US and London exchanges. Though there appears to be arbitrage concerns (delta between two exchanges), this has not proven to be a reality because of the timing of the markets, and the culture of investors who deal in the AIM exchange.
For the US company that has not gone public in any market, the AIM exchange may provide access to the public markets in order to understand how public markets work. There are no Sarbanes-Oxley equivalent rules or costs.
Since 1995, there have been 2360 initial public offerings on AIM. During the initial public offering process, valuation is addressed often and early as opposed to the US where there is a silent period prior to an initial public offering.
Most investors in the AIM market are UK small cap fund managers. On the NASDAQ, 25% of the investors are retail investors.
The legal and accounting systems are similar to US laws and US GAAP.
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