Alternative Investment Market – what is it?

AIM (Alternative Investment Market) – a sub-market of the London Stock Exchange – allows smaller companies to float shares with a more flexible regulatory system than is applicable to the main market. Launched in 1995, AIM has raised almost £24 billion for more than 2,200 companies and is the most successful growth market in the world.

 Alternative Investment Market – ideal for small companies

The alternative investment market performs a crucial function for smaller companies, seeking to raise equity capital from private and professional investors. Businesses can opt to list shares on an alternative market stock exchange to raise funds if they don’t adhere to tight regulatory – and other requirements – set as a minimum standard for listing on one of the world’s main market exchanges.

 Alternative Investment Market – the rules

London’s alternative investment market – also known as AIM – is different from other stock exchanges due, predominantly, to a much more flexible regulatory framework based broadly of self-regulation and a ‘comply or explain’ model. This allows AIM-listed companies to either comply with the rules of the market, or present a reasonable explanation as to why they might not.

Alternative Investment Market – what the investor needs to know

There are a number of advantages to investing in AIM-listed companies the most obvious being the opportunity to invest in fledgling companies with excellent growth prospects that, fundamentally, would otherwise be unable to list on the main London stock exchange due to capital requirements.

Alternative Investment Market – research

A major pitfall of investing in shares listed on alternative investment markets is the lack of credible information available to investors researching listed companies. Existing rules require companies to have a website and employ a PR company in order to communicate relevant company news. There is often little information available and, in many cases, investors must rely entirely on the advice of a stockbroker which may make recommendations or offer share investing tips.

 Talk to the experts at Compare The Financial Markets   

Choosing the best alternative investment can be difficult, so careful consideration is crucial. Your questions on best alternative investments will be answered by our industry experts, free of charge. 

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