How AIM Works
AIM Nominated Broker
All London AIM-listed companies must also have a Nominated Broker at all times. The Nominated Broker assists the company in raising capital and makes a market in the London AIM-listed company’s shares.
The Nominated Broker plays a crucial role in the capital raising process on London’s AIM, acting as an introducer to appropriate institutions and other prospective investors, supporting the London AIM IPO with the publication of equity research and sizing and pricing the London AIM IPO in consultation with the company. For 90% of the companies listed on London’s AIM, the Nominated Adviser and the Nominated Broker are one in the same, although a strong case can be made for the separation of the Nominated Adviser and Nominated Broker roles.
In recent years, most London AIM IPOs have taken the form of a Placing to institutional investors, however, companies that are already listed on London’s AIM may be required by their Nominated Adviser to pursue a Placing and Open Offer or a Rights Issue transaction with a view towards ensuring that the company’s existing London AIM shareholders are being treated fairly.
There are 80 firms in London that act as Nominated Brokers; however, there are often vast differences between the firms. Most Nominated Brokers focus on certain industries (sectors) of the market in which they have developed particular expertise and/or Nominated Brokers focus by size of company in terms of the amount of capital the company is seeking to raise from a London AIM IPO and/or the company’s expected market capitalization upon listing on London’s AIM. As a consequence, each Nominated Broker’s ability to reach into the various segments of the London AIM investment community, namely, Institutions, Private Client Brokers (PCBs) and High-Net-Worth Individuals (HNWIs) is different, therefore, it is crucial that a company chooses its Nominated Broker(s) wisely.