Chris Boxall, fund manager at Fundamental Asset Management, says he's 'feeling pretty good about 2017' for AIM listed stocks.
Chris, who runs the AIM Portfolio fund – which caters for people who are interested in investing for inheritance tax purposes – says the AIM has changed so much having gone from over 1,700 to just under a thousand companies. The effect of this, he says, is it has raised the quality of investment opportunities and the average market capitalisation is now around £80 million.
On the funding issue, which, in times of financing pressures in the past for many on AIM, Chris talks about the growing trend in crowd-funding opportunities which is helping the 'micro-cap' businesses. Inevitably this will mean that corporate brokers will miss out on some business, but Chris says the market still needs a strong corporate broking sector and hopes that it can adjust.
On the subject of takeovers, the Alternative Investment Market has a history of high churn as companies drop out through the mergers and acquisition process, but Chris says the situation recently has been exacerbated by the drop in sterling and he says 'post-Brexit, UK PLC is for sale'. Chris says he can see more of the London stock market going to foreign ownership, if only because of the depreciation of sterling.
For AIM listed companies themselves, there are not many that are overly exposed to the foreign exchange movements. That said, Chris says those with overseas earnings have seen a benefit, but warns that this is a temporary phenomenon.
Chris says, in sum, he wishes that instead of offering blue chip exposure that he had just focused in on the AIM space over the last decade. He says investment performance has 'knocked the lights out' of other areas and says that he does not see that changing in the near.