Small Talk: Darling's mixed blessings for small companies

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The Independent Online

Even before Alistair Darling took the weight off his feet last Wednesday afternoon, a host of lobby groups, advisers and professionals were firing off thoughts on how the Finance Bill would affect them. As in any Budget, there were winners and losers; and those with interests and companies listed on the Alternative Investment Market (Aim) were no different.

The BioIndustry Association (BIA), which represents biotech companies, gave a cautious welcome to Mr Darling's launch of of a £750m Strategic Investment Fund. The fund, the chancellor says, is intended to, "promote research and development and harness commercially our world-class science base".

The BIA hopes the money will go some way to plugging the increasingly drastic shortfall in biotech funding that has been caused by a lack of appetite among traditional investors, who have largely abandoned the industry in the search of less risky companies.

In these "challenging times" it was encouraging to see such signs of the Government's long-proclaimed support for bioscience companies, said the BIA's chairman, Clive Dix.

"We have highlighted the need for a high-tech investment fund. The BIA will be reviewing the fund detail, including the mechanism and the amount accessible to bioscience, to ensure that companies in our sector are swiftly able to benefit. It is essential that the fund is now implemented rapidly," he said.

However, it was certainly not all cheer for Aim. Almost as quickly as the BIA welcomed Mr Darling's speech, others were accusing the government of missing a trick: "The chancellor has ... missed this golden opportunity to reinvigorate trading and increase liquidity on Aim," said Tim Stocks, who heads the financial institutions and markets group at law firm Taylor Wessing. Mr Stocks' beef is that is that the Budget has ignored lobbying from the "the investment community" to allow venture capital trusts (VCTs) to trade in Aim shares.

The rationale for VCTs, which are allowed to participate in IPOs, is to encourage high net worth people, through tax breaks, to invest in growth companies. Since the number of IPOs has dried up, VCTs are sitting on cash, says Mr Stocks, and despite several meetings with ministers, the government is yet to be moved.

Aim is certainly in need of some help: the accountancy firm Deloitte last week warned that just £3m was raised in new listings in the first quarter of the year and declared the junior market dead.

However, Jerry Keen, of broker Blue Oar Securities, says the right deals can still get done. Mr Keen helped raise £1.2m through a placing for Tower Resources, an oil and gas exploration company, last week, and adds that this is the sixth deal he has done this year.

Brighter smiles all round at Imperial

The champagne corks will be popping at London University's Imperial College this morning when Aim-listed Imperial Innovations reveals it has turned an interim profit of £1.3m.

The group was spun out of the university, which still owns a 52 per cent stake, several years ago to invest in early-stage science and technology companies, including, for example, OSspray, a group that has a product for polishing teeth using bio-active glass; a good thing for people with sensitive teeth. Imperial Innovations owns 22 per cent of OSspray.

The company takes big stakes in start-ups, mostly from the university itself, which it then hopes to sell on to bigger groups at a later stage, for a sizeable profit.