Small firms to get new equity source

Investors aiming for good, if potentially risky, returns will soon be able to opt for shares in small companies trading on a new market, writes Nic Cicutti.

The Stock Exchange is to launch the Alternative Investment Market in June, offering new and growing companies a cheaper way of raising equity capital. Up to 200 companies, many of whose shares are available as matched bargains, could join the market by the end of the year. Companies the exchange hopes to attract to AIM include young businesses, management buyouts, family firms, and some former Business Expansion Schemes. Companies may also choose to transfer from the USM market, which closes at the end of 1996.

A spokesman for the exchange said: "AIM is designed for professional or experienced investors who understand the nature of the market and are prepared to accept the potential risks and rewards of investing in young and growing companies."

Investors in a range of investment and unit trusts specialising in smaller companies may also find part of their funds going into AIM-listed firms.