For nearly 30 years, AIM has played a critical role in supporting the UK’s most ambitious growth companies. Since its launch in 1995, it has helped thousands of businesses access the capital they need to scale, innovate and create jobs across the country.
Yet despite these fundamentals, AIM today trades at a meaningful valuation discount to both it’s long term average multiples, and to wider market peers. This presents institutional investors with an opportunity to potentially access long-term growth and diversification, while aligning with the objectives of the Mansion House Accord.
One of the many success stories from AIM’s history is AB Dynamics.
When the business listed on AIM in 2013 at just over 100p a share, few anticipated that this Wiltshire-based group would evolve into a leading global provider of advanced development, testing and verification solutions for the automotive industry.
Since then, the company has capitalised on major industry shifts – including the rise of electric vehicles, new market entrants and advances in autonomous driving technologies – helping propel its share price to nearly 1,300p today.
While not every company follows the same trajectory, AB Dynamics illustrates the role AIM can play in helping high-potential businesses scale, innovate and create meaningful economic impact across the UK.
Supporting growth and innovation for 30 years
AIM is the London Stock Exchange’s market for smaller, high-growth UK and international companies, purpose-built to provide scale-up capital and liquidity for SMEs. Since its launch in 1995, AIM has raised over £135bn and supported more than 4,000 companies1. Today, over 550 businesses with market caps from sub £10m, to over £4bn call AIM home2.
The market’s economic impact is tangible. AIM companies contribute £68bn in GVA and support nearly 800,000 jobs – driving innovation, regional growth, and productivity3. From industrial hubs in the north to innovative clusters in the south, AIM companies are helping transform local talent and innovation into global businesses. As a global marketplace valued at around £70bn, AIM continues to attract both UK and international issuers4.
A compelling growth and diversification opportunity for institutional investors
Alongside its role as a proven engine for innovation and economic growth, AIM continues to offer compelling potential benefits for investors seeking long-term growth, diversification and exposure to the companies shaping the industries of tomorrow.
AIM provides institutional investors with exposure to high-growth companies and emerging sectors that are often underrepresented or entirely absent from large-cap indices. These businesses often sit at the forefront of innovation, across a range of industries including healthcare, technology, industrials, financial services, and consumer. By investing in AIM, investors can access earlier-stage growth opportunities while diversifying away from the more mature industries and businesses that dominate the top of the FTSE 100.
Despite delivering strong earnings growth, the AIM market continues to trade at a meaningful discount to both its own long-term average and to global and larger-cap peers. We believe this valuation gap, reflects structural under-allocation over recent years, rather than fundamentals, creating a potentially compelling entry point for long-term, patient capital. For institutional investors able to take this approach, this mispricing presents a potential opportunity to capture growth at highly attractive entry valuations.
Alignment with the Mansion House Accord and place-based impact
Allocating capital to AIM also aligns closely with UK policy initiatives such as the Mansion House Accord, which seeks to encourage greater pension capital investment into productive growth assets that support the domestic economy.
AIM-listed companies play a significant role in driving regional economic growth across the UK, delivering tangible place-based economic benefits. On average, these businesses are around 50% more productive than private peers and generate approximately four times more overseas revenue, supporting regional growth, higher-quality job creation, and export-led productivity gains across the UK7.
Historical headwinds facing the market
Like global small and mid-cap equity markets more broadly, AIM has faced some headwinds in recent years. The continued shift towards passive investing has reduced the flow of capital available to smaller listed companies. At the same time, higher interest rates have had a disproportionate impact on growth enterprises. Changes to Business Relief for AIM-listed companies in the 2024 UK Budget have added further uncertainty.
Capital outflows have continued to pressure share prices, leaving UK small-cap markets trading at historically wide discounts to large caps. AIM, in particular, is now valued on multiples last seen during the Global Financial Crisis, despite the expectation of earnings growth comparable to NASDAQ.
At the same time, a shortage of domestic scale-up capital on listed markets means too many promising UK businesses are being acquired by overseas trade buyers or private equity before their true value is realised. This results in lost jobs, growth potential and long-term value for the UK economy.
Momentum is building
More recently however, the narrative behind supporting small quoted companies has begun to change. The London Stock Exchange’s feedback statement on Shaping the Future of AIM signals a clear ambition to ensure the market competes effectively with private equity, while recent Budget announcements reinforced government support for UK capital markets, including an increase in the amount VCTs can invest in qualifying companies.
With valuations at multi-year lows and meaningful progress across the LSE, and government in supporting our growth equity markets, the foundations are being laid for a healthier, more competitive environment in which growth companies can thrive in a listed environment supporting jobs, and driving GDP across the UK and beyond.
“Growth begins with the spark of an entrepreneur. Half of new jobs in Britain are created by scale-up businesses. And we want those jobs created here, not somewhere else.”
The Rt. Hon. Rachel Reeves MP, Chancellor of the Exchequer, 2025 Budget
Backing growth and innovation for over 25 years
For over 25 years, Octopus has supported growth business across the AIM market. Today, we are the largest investor within the FTSE AIM index, combining long-term, patient capital with a highly experienced team capability.
We are active investors, supporting companies to growth both domestically and internationally, to scale and deliver on potential. We also actively engage with policymakers, ensuring market governance remains strong and that AIM remains a highly attractive platform for future success. We’ve seen first hand how patient capital can transform a business – supporting these companies early isn’t just investing; it’s backing the companies and industries shaping tomorrow’s economy.
Where growth meets impact
AIM offers institutional investors a unique opportunity to access UK growth in a highly liquid market, diversify portfolios, and deliver measurable impact. It provides investors with exposure to innovative businesses and a chance to back the next generation of growth in the UK.
“We’re deeply committed to the AIM market, and thoroughly enjoy working closely with entrepreneurs, seeing the extraordinary journeys their businesses can take with the right institutional support and access to capital. It’s been an absolute privilege to watch these businesses grow the way they have over the last 20 years.”
Richard Power, Head of Quoted Companies
If you’d like to explore the AIM market or learn more about Octopus’s approach, we’d be happy to continue the conversation.
1 https://www.londonstockexchange.com/raise-finance/equity/aim
2 FactSet and Octopus Investments, as at Feb 2026
3 Grant Thornton report 2023, The economic impact of AIM companies
4 London Stock Exchange, as of 30 September 2025
5 Grant Thornton report 2023, The economic impact of AIM companies
