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1 – 10 of over 52000Graeme Newell and Muhammad Jufri Bin Marzuki
The Alternative Investment Market (AIM) is an important UK growth-focused stock market. The purpose of this paper is to assess the significance, risk-adjusted performance and…
Abstract
Purpose
The Alternative Investment Market (AIM) is an important UK growth-focused stock market. The purpose of this paper is to assess the significance, risk-adjusted performance and portfolio diversification benefits of property companies on the AIM stock market over 2005-2015. The post-Global Financial Crisis (GFC) recovery of property companies on AIM is highlighted, as well as their performance compared with property companies on the London Stock Exchange (LSE) main board.
Design/methodology/approach
Using monthly total returns, the risk-adjusted performance and portfolio diversification benefits of property companies on the AIM stock market over 2005-2015 are assessed and compared with a range of other asset classes. Sub-period analysis is used to assess the post-GFC recovery of the property companies on AIM.
Findings
Property companies on AIM delivered poor risk-adjusted returns over 2005-2015, with limited portfolio diversification benefits with the overall AIM stock market. However, since the GFC, property companies on AIM have delivered strong risk-adjusted returns, with improved portfolio diversification benefits with the overall AIM stock market. This post-GFC performance is shown to be more than a small cap effect, reflecting the property portfolios in these AIM property companies. Despite this strong post-GFC performance, the AIM property companies under-performed property companies on the LSE main board on a risk-adjusted basis.
Practical implications
AIM provides an important platform for property companies seeking start-up and growth opportunities in a less-regulated funding environment. This has been reinforced by strong risk-adjusted performance in a post-GFC context. However, the stronger risk-adjusted performance of LSE listed property companies and their superior scale, resources and higher quality property portfolios present challenges for increased investor support for the AIM property companies going forward.
Originality/value
This paper is the first published empirical research analysis of the risk-adjusted performance and diversification benefits of property companies on the AIM stock market. This research enables empirically validated, more informed and practical property investment decision-making regarding the strategic role of property companies on the AIM stock market in a portfolio.
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The Alternative Investment Market was launched by the London Stock Exchange with much publicity in June 1995. It is a market created for smaller and growing companies, with fewer…
Abstract
The Alternative Investment Market was launched by the London Stock Exchange with much publicity in June 1995. It is a market created for smaller and growing companies, with fewer entry requirements and continuing obligations than for companies joining the Official List of the London Stock Exchange. This paper looks at the apparently conflicting goals of lower regulation and shareholder protection which are relevant when considering the new market before discussing the principal AIM regulations and some practical implications arising from the application of those regulations.
This paper introduces the reader to the London Stock Exchange's Alternative Investment Market (AIM) and seeks to identify those companies listed that would be in the broad apparel…
Abstract
Purpose
This paper introduces the reader to the London Stock Exchange's Alternative Investment Market (AIM) and seeks to identify those companies listed that would be in the broad apparel sector.
Design/methodology/approach
The paper gives a numerical value of the stability/success of those companies by using the QuiScore rating system and capital gearing.
Findings
The paper considers the progress made by the companies in this sector on corporate governance looking at the extent of their moves towards the provisions of the combined code.
Originality/value
The paper sets out areas for further research in this field to extend this study and broaden the knowledge on secondary market development.
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Given the long lived literature on the small firm funding gap and the contemporary evidence on the easier access to equity finance of the London proximate firms, this study aims…
Abstract
Purpose
Given the long lived literature on the small firm funding gap and the contemporary evidence on the easier access to equity finance of the London proximate firms, this study aims to examine the relevance of spatial proximity to London in explaining the amount of monies raised by small British firms at Initial Public Offerings (IPOs) on the UK Alternative Investment Market (AIM).
Design/methodology/approach
A cross sectional regression analysis is conducted to see whether proximity to London affects the amount of monies raised by small British firms at IPOs.
Findings
The results suggest that proximity to London has a positive effect on the amount of monies raised through IPO and, therefore, there exists a London bias even for those small firms which manage to overcome the equity gap problem and achieve a London listing.
Originality/value
The paper contributes to both the economic geography and the small firm regional disparity literature by documenting for the first time that geographic location has an impact on the amount of monies raised by small IPOs in the UK.
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The purpose of this paper is to identify the factors affecting the growth of companies listed on the Alternative Investment Market (AIM), the London Stock Exchange market for…
Abstract
Purpose
The purpose of this paper is to identify the factors affecting the growth of companies listed on the Alternative Investment Market (AIM), the London Stock Exchange market for young and growing companies.
Design/methodology/approach
The author investigates post-initial public offering (IPO) growth for a panel of 665 companies listed on the AIM between 1995 and 2006. The empirical model uses the generalized method of moment-System (GMM-SYS) estimator.
Findings
The findings confirm that small companies listed on the AIM grow more quickly after the IPO. It seems that both human capital and firm characteristics are important determinants of their rapid growth.
Practical implications
The results of this study have some implications for policy. Policy makers should take account of the relevance of an efficient financial system. It is important also to consider the process of transformation of the cultural and behavioural attitudes of various countries towards entrepreneurship.
Originality/value
This paper analyses the determinants of firm growth in a particular entrepreneurial setting, that is, IPO on the AIM, the sub-market of the London Stock Exchange.
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This chapter examines the determinants of managerial incentives at the time of an Initial Public Offering (IPO) on the Alternative Investment Market (AIM) of the London Stock…
Abstract
This chapter examines the determinants of managerial incentives at the time of an Initial Public Offering (IPO) on the Alternative Investment Market (AIM) of the London Stock Exchange. We identify a trade-off relation between board monitoring and incentives that is specific to CEOs. We also investigate the role of stock option grants and share transactions at the IPO. We find that the IPO may be used as a wealth diversification opportunity. We report that undiversified managers with large pre-IPO shareholdings receive smaller stock options grants and sell more shares in the IPO than more diversified managers.
Paul D. Broude and Joseph E. Levangie
Most entrepreneurs are continually concerned about their finances. Their companies perhaps not yet profitable, they may have a fear of “running out of dry powder.” These…
Abstract
Most entrepreneurs are continually concerned about their finances. Their companies perhaps not yet profitable, they may have a fear of “running out of dry powder.” These entrepreneurs often have fallen in love with their company's technologies, products, and potential markets, but they require more resources. Invariably these emerging ventures shroud their fear of the grueling capital raising marathon by presenting voluminous business plans to potential investors. They often flaunt their “optimized business models.”” Investors, however, typically want to know why the potential investment is such a good deal. The entrepreneur often wants guidance regarding what to say to whom in a changing financing environment.
In this article, our “Practitioner's Corner” associate editor Joe Levangie collaborates with a long-time colleague Paul Broude to address how businesses should “make their capital-raising initiatives happen.” Levangie, a venture advisor and entrepreneur, first worked with Broude, a business and securities attorney, in 1985 when they went to London to pursue financing for an American startup. They successfully survived all-night drafting sessions, late-night clubbing by the company founder, and even skeet shooting and barbequing at the investment banker's country house to achieve the first “Greenfield” flotation by an American company on the Unlisted Securities Market of the London Stock Exchange. To ascertain how the entrepreneur can determine what financing options exist in today's investing climate, read on.
Giancarlo Giudici and Peter Roosenboom
In this chapter we describe the development of venture capital and new stock markets in Europe. We argue that markets for high-growth stocks offer venture capitalists a valuable…
Abstract
In this chapter we describe the development of venture capital and new stock markets in Europe. We argue that markets for high-growth stocks offer venture capitalists a valuable exit opportunity for their investments. This allows them to re-invest their money in other start-up companies and may spur the rate of new business creation and technological innovation. The private equity market in Europe today is as large as it was just before the advent of new stock markets in 1997–1999. As such, the need for stock markets that allow private equity investors to divest their equity stakes in growth companies did not disappear.
This paper aims to review the development of the Channel Islands exchange and assess the potential diversification benefits arising from the inclusion of this market in investment…
Abstract
Purpose
This paper aims to review the development of the Channel Islands exchange and assess the potential diversification benefits arising from the inclusion of this market in investment portfolios containing UK and French equity assets.
Design/methodology/approach
First this paper uses a simple stochastic drift, GARCH, and time‐varying parameter CAPM to model total returns indices. Second, it uses the unconditional and conditional means and variances from first stage as inputs into a mean‐variance portfolio quadratic optimisation problem: the solutions of which denote the optimal asset weights.
Findings
The evidence suggests that although there are serious difficulties in modelling time series from small illiquid equity markets owing to price‐rigidity, the limited benefits that do exist for the inclusion of Channel Islands assets in portfolios do so preferentially with Paris as opposed to London assets.
Originality/value
This paper extends the literature development policy options for small offshore markets and provides the first analysis of the Channel Islands.
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