Nearly two thirds of companies based in the United States that have listed on the Alternative Investment Market over the past five years have lost money for investors, an analysis by The Times has found.

Only 17 out of the 46 companies from across the Atlantic that raised capital on London’s junior stock market between 2001 and July this year are currently trading above their issue price.

Even allowing for the slide in the US dollar, the performance is egregious in light of solid gains for home-grown small-cap companies over the same period.

While America’s post-Enron Sarbanes-Oxley legislation has widely been seen as positive for the City in driving US business towards London, The Times’s analysis lays bare the heavy cost for burnt investors. US companies raised £1.8 billion of new investment on AIM.

Nine American companies have more than halved in value, including Cosentino Signature Wines, the Napa Valley wine producer that admitted last week that it needed a rescue refinancing less than a year after joining AIM.

The worst performers include two companies — Sky Capital Holdings, a loss-making New York-based stockbroker, and Sky Capital Enterprises, a spin-off investment vehicle — which had their shares suspended last month after an FBI raid on their Wall Street offices.

These setbacks come on the eve of efforts by the London Stock Exchange to raise its profile further among aspiring AIM constituents from America. Next week the LSE, in conjunction with MG Equity Partners, an Anglo-American investment house, is hosting the first roadshow of its kind in London to showcase ten US companies considering joining AIM.

The high proportion of American flops has raised concerns over the adequacy of current vetting procedures. Because of the distance of US companies from London, there are worries that pre-float due diligence and post-float contact between them and their nominated advisers (Nomads) is neither as thorough nor as regular as that of their UK counterparts.

“You have to treat a lot of these companies with the utmost suspicion,” Giles Hargreave, who runs the Marlborough Special Situations Fund, said. “You have to question whether a Nomad can do sufficient due diligence on a company in another continent.”

There has also been criticism that the LSE has attracted many overseas companies to AIM but has not done enough to stoke demand for their shares among overseas investors.

The controversy surrounding Sky Capital Holdings threatens to slow the flow of US companies to AIM. The sum raised by American companies on AIM has fallen from an aggregate £1.24 billion in 2005 to £608 million so far this year.

Marcus Stuttard, deputy head of AIM, said: “Investors are becoming more choosy. But I think the pipeline of US companies coming to London is still very strong.”

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