US Firms Flock To London

London’s AIM market has found itself welcoming a flotilla of US firms, as increasing numbers of growing North American businesses cross the Atlantic in search of a stock market listing. The causes of this influx are two-fold. Firstly there are the quirks of the US market itself. As Donald Stewart of law firm Faegre & Benson explains, US corporate finance advisers keen to raise equity finance for small and medium sized companies are getting themselves acquainted with AIM because ‘NASDAQ’ has raised its bar. 
Imposing minimum market capitalizations and share prices has left large numbers of US growth companies with nowhere to go. The US National Venture Capital Association estimates there has been a 59 per cent decline in listings for small to medium sized companies in the US.’

Then there is the regulation. In the wake of the Enron scandal, US regulators introduced the controversial Sarbanes-Oxley standards, which were designed to tighten up the regulation and accounting standards applicable to quoted companies. 
While they appear to have achieved this some have suggested that they may have actually gone too far and, as a side effect, increasing numbers of growing US companies have started to look overseas for a stock market listing. AIM seems to be the natural choice. Certainly to Jarvis Coffin, chief executive of Massachusetts-based internet advertising group Burst Media, (click link for 2008 company report REVENUES $28m) the aforementioned factors were key in deciding to list in London.
AIM Adviser Index Article Date: Jun 11 2009

It has been a sunny spring for AIM, with valuations getting a much needed boost from a recovery in investor sentiment. The AIM All Share index, which began the year below 400, is now over 500. Advisers will be hoping this heralds a renewed enthusiasm among companies for floating on the market, which has seen only two initial public offerings so far this year.
    The most striking change this month is that Collins Stewart has dropped to fifth place in the broker table and seventh as a nomad. The firm, which has normally come second in both of those rankings since our records began in 2007, lost six clients last month, but it retains the biggest slice of AIM by market capitalization, representing companies worth almost £3 billion.  Because of the wide range of sizes among AIM companies, and the preference of some firms to serve particular niches of the market, there is only a weak correlation between the number of clients on an adviser’s books and the total valuation of those clients.  Of the top ten AIM nomads by aggregate client capitalization, only six are listed in the table below: the remainder being Numis, JP Morgan Securities, Panmure Gordon and Investec Investment Banking. Equally, WH Ireland has risen to third place in the broker ranking, its highest position since our records began, and yet there are 31 firms which represent a larger chunk of AIM by value, including unlikely names such as Smith & Williamson, better known for its accountancy expertise, and Deutsche Bank.

Among the accountants, there is no change in ranking: the top seven, all global businesses except for Baker Tilly, are head and shoulders above the rest in terms of client numbers and market capitalization of those clients. Across the top ten, client numbers are down slightly, while market capitalization is up 15 per cent. Meanwhile, Lawrence Graham, Norton Rose and Eversheds continue to head the league of leading AIM lawyers.

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