On the PLUS side
OFEX started to gain momentum in the late 1990s, at the same time as the dotcom boom was encouraging flocks of plausible entrepreneurs to raise cash for impressive-sounding online ventures. When the bubble burst, share traders deserted the market and it took a long time to re-establish itself.
Matters came to a head in 2004 and 2005 when OFEX Holdings, the company established to administer the market, had to stage an emergency refinancing. PLUS Markets Group became its successor, with City support. Now, steered by Brickles
and chaired by City investment professional Stephen Hazell-Smith, PLUS Markets Group, itself quoted on AIM, is busily putting the market back on the map. The name OFEX formally disappears this month.
PLUS, which has attracted several prominent City market makers such as Close Brothers, KBC Peel Hunt and Teather & Greenwood, operates a quote-driven market for these companies. In addition, PLUS, which has applied for Recognised Investment Exchange status, provides a secondary trading platform for 830 London Stock Exchange-quoted companies, with a combined value of £120 billion. This includes all constituents of the FTSE Small Cap and Fledgling indices, 75 of the FTSE 250 index and 12 AIM counters.
Market motivations
For Jean Dong, bringing Global Education to PLUS was a way to raise the company’s public profile as well as a means to raise funds. Serial small company boss John French is chairman of PLUS-traded condom and allied products supplier Sexual Health Group and chairman of a PLUS advisory panel on secondary market issues. He says the market is ‘a nursery school’ for young companies and ‘a valuable entry market’.
In common with others, he argues, ‘the concept was right but, before the latest changes, it lacked credibility and support from the professionals. Now, the quality of transactions is better, the vetting and rules are much better and the market is getting increased support from institutional investors.’
Wendy Rosenthal, a high-powered American property manager who raised £300,000 on PLUS last year for leisure, property and retail consultant Hyper Entertainment, is enthusiastic. ‘It’s cheaper and less pressurised by regulation than the London Stock Exchange or AIM,’ she argues, ‘and, because it wins backing from Enterprise Investment Scheme investors who for tax reasons do not want to sell out fast, you are given a chance to grow your business. ‘Our subsidiary, Hyper Exhibitions, is helping stage an exhibition of Carnet jewellery by Michelle Ong in Glasgow starting this month. We could not have done that without a PLUS market rating.’
But Rosenthal has had problems, too, with becoming a public company director. ‘I never realised all the things I had to do, for example at the annual general meeting, or what you can tell shareholders or the Press and when you are considered an "insider".’
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