This is a mature market that will still be there when the economy picks up.

You might be forgiven for thinking otherwise by the amount of derisory press AIM has received lately.

So, you may ask, where is the good news? 

The answer is also in the statistics.  There are still 1455 companies on AIM.  In spite of the ferocity of the economic recession, AIM is a mature market and will still be there when the economy picks up. 

Over £670m has been raised in the first four months of 2009.  it may not seem like much in comparison to the block buster number we have become used to seeing during the boom years of 2006 and 2007.  However by comparison the figure represents far more cash raised on AIM than on any other junior growth market in the world.

Secondary fundraising in 2008, at £3.2 billion was well in excess of the £2.48 billion raised in secondary’s in 2005 – tending to indicate that existing companies can still use AIM to support their activites.

It also looks like the pace of de-listings may have slowed – 25 companies left AIM in April 2009 in comparison with 37 leaving in March.  It is also clearly wrong to equate de-listing as evidence that there is something wrong with the market.  Surrendering their AIM admission is the right thing to do for a variety of companies for a variety of reasons.  Some may be in financial difficulty, some are the subjects of takeover activity, some may be private companies “in disguise” with significant management owned or controlled holdings while others may believe the future lies in the hands of private equity.

The most potent good news is that May 2009 saw the flotation of Max Property raising £200m at IPO and a £30 million fundraising by Vertu Motors, the car retailer.  In addition Platmin, the Toronto based platinum group, announced a £39 million raise while Advanced Computer Software also announced plans to raise £43 million.

This is clearly the most solid evidence we have that AIM is making solid headway towards doing what it is supposed to do – providing access to investment.

What should also not be forgotten is that the other great strength of AIM so far in 2009 has been its performance.  In the first 5 months of 2009 the FTSE 100 has fallen by over 3%.  By comparison the AIM 50 has grown by an impressive 24% while the AIM 100 has grown by 21%.

It must be no bad thing that we remain far from a return to the heady days of 2006 and 2007 when huge numbers of companies were turning up on AIM believing the streets to be paved with gold.  There can be little doubt that a number of companies came to the market which should not have.  As with the housing market, it was inevitable that there would be a market correction.

However AIM has been a victim of its own success. 

The pre-recessionary run away success it enjoyed, particularly from mid 2005 to mid 2007, was quite remarkable and, while the model was overtly imitated elsewhere, no other market could touch it.  As a result it has been easy for critics of the market, whatever their motivation, to get headline interest by knocking the market.

AIM remains a mature and vital market.  That it is going through a shakeout should be seen as a sign of its inherent strength rather than as a problem.  As a mature market AIM is increasingly likely to become a successful home for higher quality companies than for very early stage ventures.  Due to the absence of formal hurdles, it will remain the job of the investors to decide which companies will make a success of it and which will not.  Isn’t that how a market is supposed to work?