Virax Holdings, an Aussie-quoted biotech minnow with HIV and prostate cancer treatments now undergoing trials, is one of the latest overseas companies seeking to list on AIM.

Launched 11 years ago as the London Stock Exchange’s junior partner, AIM is now the leading international market for fast-growth companies in search of funds for expansion. Growth Company Investor’s latest unique survey of this area, carried out in association with solicitor Pinsent Masons, shows that of the 1,560 companies quoted on AIM, 277 – nearly 18 per cent – are overseas based. This foreign legion raised £2.5 billion in the 19 months to 31 July and now boasts a combined market value of £25.2 billion, an even more significant third of AIM’s entire market capitalisation of £74.2 billion at that date.

AIM’s lighter regulatory touch, favourable tax regime and extensive pool of institutional and private investors has given it a truly global appeal, with no fewer than 27 countries now using the market. It is increasingly attracting American companies at a time when the US Nasdaq market is suffering from increasingly cumbersome regulations and some 35 US companies are quoted on AIM, together worth £2.2 billion.

Florida-based speciality financier Peach Holdings, chaired by Dermot Smurfit, came to the market in March and has now agreed to a £404 million takeover by Wall Street house DLJ. US internet advertising services play Burst Media Corporation raised £38 million on AIM in April, but later lost two thirds of its value on a shock results warning. A notably stronger US performer has been online advertiser 121 Media.

Eastern promise
The Far East is becoming increasingly important. Japanese fingerprint technology specialist Secure Design KK won strong support as AIM’s first Japanese company when broker Charles Stanley introduced the shares at 47p in July and is still threefold ahead at 145p.

Chinese solar power play ReneSola’s £26 million float through Hanson Westhouse went well. China Real Estate Opportunities, floated late last year by broker Teather & Greenwood, had a warm reception.

Entrepreneur Huodong Ye won a respectable reception for China Biodiesel International. AIM quotes two Indian companies, coal bed methane play Great Eastern Energy and Delhi river toll concern Noida Toll Bridge, and more are anxious to follow.

Israel has listed 16 companies on AIM, many in software, telecoms and electronics. One, Leadcom Integrated Solutions, an international telecoms equipment supplier, trebled from last year’s 32p float price to 90p before settling back later.

Kosher food specialist Gold Frost has performed respectably. However, Selector failed to make water purification a success and is now a shell.

Irish-based Fortfield Investments also became a shell after an unsuccessful attempt to thrive in electronic equipment.

Resources still on top
Despite recent nerves, AIM’s dominant international sector remains resources and one of its most successful ventures is Canadian-based West African copper producer and explorer First Quantum Minerals. The company’s shares performed best in the period under review (see Table 4) and now command a market value of nearly £1.5 billion.

First Quantum, West Australian-based manganese and nickel star Consolidated Minerals and Irish oil and gas counter Petroceltic International have amply rewarded investors’ faith. Three Canadian companies, First Quantum, Bema Gold and Yamana Gold together account for £4 billion of market value and, together with Egypt-focused Centurion Energy and gold play Centamin Egypt, have been among AIM’s top performers.
Resources can also be risky. Dimension Resources, floated to quarry precious stones in South Africa, has been seeking another role after losing most of its value (see Table 5). Murchison United was nearly wiped out on thwarted projects, but is now toying with uranium exploration in West Africa.

Offshore attractions
London market insurer Lancashire Holdings commands an AIM tag of £683 million after raising £547 million in 2005. Based in Bermuda, Lancashire is not alone in choosing a tax-haven base.

Bermuda also plays host to Gulf Keystone Petroleum. Gambling software specialist Playtech, which raised £265 million at 257p in March, is based in the British Virgin Islands.

Lord Ashcroft’s BB Holdings operates financial services, distribution and staffing businesses in Belize and has risen nearly 1,800 per cent since 1999. Crosby Capital Partners, ex-Nomura star Simon Fry’s wheeler-dealing investment group, has thrived from its Cayman Islands base.

Chinese companies mostly prefer a base outside the People’s Republic, for tax and legal reasons. China Real Estate is based in Luxembourg and China Biodiesel in the British Virgin Islands.

Dual-listings are common. African Copper is listed on Toronto and AIM. Dutch-based and controlled mining engineering group Bateman Industries does most of its business in South Africa but is listed only on AIM for tax and regulatory reasons.

In August, Australian mining entrepreneur Keith Liddell raised £22 million on AIM and Toronto for South African platinum hopeful Platmin. Elsewhere on AIM, Liddell’s Mineral Securities backs China gold play Tianshan, also quoted Down Under, and Bermuda-based Zambezi Resources and Zambezi Nickel.