City execs plot new junior market to rival AIM

A group of City execs have laid out plans for a new small-cap market in a bid to rival the ailing AIM and rejuvenate London’s public markets.

Former Boku boss Jon Prideaux and former AIM chief executive Martin Graham are understood to have approached investors over a £4m fundraising to launch the new exchange, known as the Global Growth Market (GGM).

The funding would be used to build GGM’s technology platform and submit a licensing application with the financial regulator.

The new market plans to eliminate fund management fees and carried interest in return for providing half of the capital needs of eligible companies to encourage firms to sign up.

Prideaux told Morning Wire he expected the new venue would attract significant investment from pension funds amid growing pressure to increase their exposure to UK assets.

“We expect that pension funds would want to become capital partners…we’ve got a lot of early interest from pension funds attracted to this as a vehicle for enabling them to reach growth companies,” he said.

“That makes a great difference to their return profile and that’s very attractive to them.”

AIM transformation talks

Plans for the new market come after Prideaux initiated talks with AIM owner LSEG to revamp London’s junior market after a prolonged drought in listings. The plans are thought to have included spinning off AIM to allow new investors to come in.

However, LSEG have firmly rejected any notions of a deal. “AIM is not for sale,” LSEG said in a statement.

In a thinly-veiled critique of LSEG’s management of AIM, now in its 31st year, Prideaux told Morning Wire: “There needs to be some innovation – some change – to the way in which the public market presents its offer.

“What’s happened over the last twenty years or so has been the decline to irrelevance of the public markets as a vehicle for providing growth capital to growth companies.

“We don’t see ourselves as being in competition with the London Stock Exchange or with the AIM market, because they’re basically not on the pitch.”

The number of AIM companies worth over £1bn has dropped by 80 per cent since the start of 2022 and almost halved over the last year, according to data from the London Stock Exchange.

Prideaux is pitching the new market at fast-growing companies with double-digit growth and double digit millions in turnover, with at least five years of established business activity. He estimated that as many as 30,000 companies worldwide fit the bill – most of whom have relied on private capital – including venture capital – to grow.

“By the time these companies have become established, the VCs need the money back to recycle into new companies, but that’s not been happening,” he said.

Details of the new market were first reported by Sky News’ Mark Kleinman.