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London’s AIM has become an attractive alternative to NASDAQ for US growth companies

3 min read

18 April 2015

The number of growth seeking US companies listing on London’s AIM market is set to double by the end of the decade.

According to latest figures from Santa Monica based group Aim Advisers, 52 of the 1,104 companies listed on Aim are from the US. This equates to 4.7 per cent of the total market.

Managing director Mark McGowan said: “We expect that by 2019, ten per cent of Aim will consist of US companies growing from 52 to 110. Investors have a desire to be exposed to US dollar assets and revenue streams from high-quality, growth oriented SMEs.”

According to Aim Advisers US firms have accounted for seven per cent, or 16 of 234 Aim IPOs since 2011, compared with nine per cent of Chinese companies and seven per cent of African firms. Although UK businesses were responsible for 48 per cent of Aim floats during that period, McGowan said the “internationalisation” of the market was expected to continue with the “focus shifting to the US”.

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He said there were various factors playing into US companies hands:  “China lifted its moratorium on domestic IPOs in January 2014 and the vast majority of African IPOs were natural resource focused which is currently out of favour,” he said.

US firms which floated on Aim last year included employment intelligence technology provider ClearStar and healthcare services organisation Constellation Healthcare Technologies.

ClearStar raised $15.1m and an opening market value of $35.5m whilst Constellation raised $15.1m and a market value of $117.9m.

ClearStar, which offers background checks of employees for clients including Toyota, IBM and FedEx, is using the raised funds to increase its retail sales force and fund international growth. It is also eyeing up acquisitions in the sector.

Constellation Healthcare Technologies, a revenue cycle management firm focused on US healthcare, was seeking funding to continue its core strategy to move its back office functions to India and reduce employment costs.

Aim Advisers also revealed the number of secondary offerings undertaken by US companies on Aim totalled 17 last year raising $136m. This was down from 23 secondary offerings raising $174m in 2013.

McGowan said US firms on the market were now “self-sustaining and simply require less growth capital”.