Three Investment Banks Lead FTSE AIM 100 Advisory Amid Market Contraction

For the first time since records began in 2013, three mid-market investment banks have jointly taken the top spot in advising companies within the FTSE AIM 100 index. Berenberg, Panmure Liberum, and Peel Hunt each provide advisory services to 20 companies in the index.

This consolidation among advisers reflects a broader trend of contraction and increased concentration within London's junior market, known as AIM. The market has seen a significant decrease in the number of listed companies, with its advisory industry becoming more consolidated as top companies become acquisition targets or move to London's Main Market.

Canaccord Genuity follows closely with 18 clients. The increased client load for top brokers is evident, with the three leading firms advising an average of 91 companies each in the latest quarter, up from an average of 77 three years ago, according to Adviser Rankings. This rise in clients per broker is not due to a surge in new listings but is partly a consequence of mergers within the broking industry. Firms have adapted to weaker trading volumes, a scarcity of initial public offerings (IPOs), and rising research and regulation costs. Notable mergers include Panmure Gordon and Liberum forming Panmure Liberum, FinnCap and Cenkos Securities becoming Cavendish Capital Markets, and Deutsche Bank acquiring Numis.

The AIM market itself has shrunk considerably, with the number of companies falling from 1,694 at the end of 2007 to 612 currently, according to UHY Hacker Young. While some of this decline is expected for a market designed for younger, riskier businesses, a significant factor in recent years has been companies deciding the benefits of listing no longer outweigh the costs.

Takeovers have emerged as the primary reason for companies leaving AIM. Over the 20 years leading up to the end of 2025, 767 companies, or 36 percent of all delistings, were acquired. Financial stress or insolvency accounted for 20 percent, with failed business strategies contributing 303 departures. This trend suggests that AIM continues to produce valuable businesses that are attractive to buyers, but it also highlights issues with market valuation and replenishment.

Private equity funds and corporate buyers increasingly view AIM companies as undervalued, willing to pay more than institutional investors, according to Colin Wright, chairman of UHY Hacker Young. While acquisitions can reward shareholders with a premium, they also remove growth-oriented companies essential for the market's dynamism and investor appeal.

This situation raises questions about whether successful UK-listed companies are too easily acquired. Wright suggested that boards might need greater autonomy to resist bids that undervalue long-term prospects, potentially drawing comparisons with exchanges like the NYSE or Nasdaq. Such a shift could deter opportunistic bids during temporary market downturns but might also limit shareholders' immediate gains.

Beyond departures, the market faces a challenge in attracting new listings. A healthy growth market should function as a pipeline, bringing private companies public and facilitating the strongest toward the Main Market. While six companies graduated to the Main Market in 2025, the highest number in a decade, and five more are slated to move or have announced plans to do so in 2026, the pipeline of new IPOs remains subdued, indicating a persistent difficulty in replacing departing companies.