Impax Asset Management
Ticker: IPX Exchange: AIM

Impax is a market leading and multi award winning manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally.

Latest Reports

AUM racing ahead of forecasts

Published: 9th September 2020

By 31 August 2020, 11 months into the financial year, assets under management had grown to £19.3bn, substantially above our previous year-end forecast of £17.2bn, and 28% up on the FY19 year-end level of £15.1bn. Impax’s strong and continued progress since the March 2020 market lows sees it set to exceed our year-end forecasts for revenue (£77.9m), adjusted operating profit (£20.9m), and net cash position (£32.1m) by some margin.

Such AUM performance is indicative of both being in an asset management sweet-spot and being a winner within it. Impax has obviously benefited from positive market moves, but also continues to see substantial client inflows, which we believe will continue. The share price has reacted accordingly, closing at 493p on 8 September 2020, 27% up on the 31 December 2019 price of 389p and far in excess of broader equity indices.

Impax is scheduled to provide a more detailed breakdown of its AUM position for FY20 in early October 2020 – splitting out client flows versus market moves and providing operating unit AUM performance (London-managed listed and real assets and US-listed assets). At that time, we anticipate updating our forecasts and valuation.

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V-shaped share price recovery looks justified

Published: 11th June 2020

Client inflows remained strong during the Q1 market rout, when many funds around the world saw some of the largest outflows in decades . That has contributed to achieving year-on-year revenue growth of 22% (£41.2m in H1-20, up from £33.8m in H1-19), adjusted operating profit growth of 36% (£10.5m vs £7.7m), and probably most importantly in such uncertain times, a further strengthening of Impax’s net cash position, up 112% from £9.7m to £20.6m. The interim dividend has been increased by 20% to 1.8p (2019: 1.5p).

In the post-results period, AUM has recovered rapidly, jumping from £14.4bn on 31 March 2020 to £17.3bn on 31 May 2020. That is a 27% annual increase measured from 31 May 2019 to 31 May 2020.

Impax has proven itself a top performer when it comes to producing long-term returns for investors. That, alongside having an attractive product suite and established distribution channels in the major capital markets of Europe, the USA and China, has resulted in it being a clear winner when it comes to attracting AUM. In a comparison with a London-listed peer group of asset managers, it ranked first in net AUM inflows during the Jan-Mar 2020 quarter and was in the top quartile over the year Apr 2019 – Mar 2020.

The V-shaped share price recovery from the March crash looks justified, and the current price of 381p is only slightly higher than our discounted cash flow valuation of 360-370p. We also remain encouraged by the macro-trend of huge amounts of capital shifting to Sustainable Investing, with Impax being a leader in that space.

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Impax AM: Interim Results Presentation June 2020

Published: 4th June 2020

Ian Simm, CEO, and Charlie Ridge, CFO, report on a record 6 months of £1.8 billion net inflows, with AUM then rising from £14.4bn at end March to £15.8bn at end April. Despite Covid-19. 

Investors want more exposure to Sustainable assets, and Impax has a unique record built on 2 decades' experience. The funds are performing well and the business is both scalable and well positioned to win further mandates.


Impressive AUM inflows despite market rout

Published: 15th April 2020

Clients of Impax continued to show their confidence in the face of a collapse in equity markets, with £1.1bn of net inflows during the recent quarter and, impressively, £6m during March. This bodes well strategically.

A key attraction will be the downturn-resilience provided by Impax’s cash-flush balance sheet. On 30 Sep 2019, cash reserves  stood at £26.2m, with no debt. Our estimates show Impax has remained comfortably cash-flow positive during H1, and over the FY to Sep 2020 will actually increase its cash position by over £9m.

The trend of capital moving into the sustainable investing space is now well established and is unlikely to merely be a short-term phenomenon. Indeed, we think investors are intensifying their hunt for ‘post-corona portfolios’ and more are turning to Impax. Consequently, the 11% decline in its shares this year seems strange.




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Full year results discussion

Published: 16th December 2019
Ian Simm, CEO, and Charlie Ridge, CFO, discuss the company's full year results, the operational leverage that is now possible within the business, and the ongoing growth in assets under management.

Foundations laid for further growth

Published: 16th December 2019
In October 2019, Impax reported impressive AUM growth, closing FY19 on £15.1bn, up 21% on FY18 (AUM continued to rise post year-end, to £15.7bn on 30 November 2019).  Now, with the release of its annual results, we see how that growth has underpinned a rock-solid financial performance. Our fair valuation of 350p/share underpins the recent gains.  Download Now

AUM impresses, ESG stars continue to align

Published: 8th October 2019
Impax closed FY19 managing £15.1bn of assets, 20% up on the £12.5bn AUM of 30 Sep 2018, and beating our forecast of £14bn. Longer-term, we think the business remains well placed for strong revenue growth, capitalising on a global structural shift towards Environmental, Social and Governance (ESG) investing, and even stronger profit growth because of operational leverage. 

AUM of London-managed listed equities (71% of total AUM, sourced mainly from institutional investors) ended the year on £11.7bn, 29% up year-on-year, an impressive performance considering the movement in major equity indices over the same period was mostly flat, typically varying between -1% and + 2%. London-managed Real assets AUM (3% of total AUM) closed the year on £445m, practically flat year-on-year with no capital raises or significant exits.

A shift of capital into ESG investments continues at pace around the world, and the outlook is for this trend to continue. The Global Sustainable Investment Alliance (GSIA) , using a very broad definition of sustainable investing, estimates that sustainable investing assets in the five major markets of Europe; the United States; Japan; Canada; and Australia & New Zealand; reached US$30.7 trillion in 2018, 34% up on 2016, and making up just over one-third of total managed assets. 

The strategic positioning of Impax, coupled with efficiently run operations, makes the investment case from a capital growth perspective look attractive. In addition, it is our view that its strategic advantages are highly likely to attract consolidation interest in the future. From an income perspective, the investment case also has merits. The business is cash generative with a progressive dividend policy. 

Impax has exceeded our previous year-end AUM forecast of £14bn, and we now look forward to seeing the impact on revenue and profits when the full-year financial results are released later this year.

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An interview with Ian Simm, CEO and Founder, about prospects

Published: 5th July 2019
Recent results from Impax AM showed further strong growth in revenues, profits, and the interim dividend - with assets under management rising to £13.3bn.

The CEO discusses the momentum in building a more sustainable global economy and how Impax invests in companies well placed to benefit from that trend. He also looks at the opportunities for further growth that can be pursued going forward.

A template for sustainable growth

Published: 10th June 2019
Impax AM is a specialist asset manager. Founded in 1998, it offers a range of thematic and unconstrained global equity strategies as well as real asset funds focused on the growth opportunity arising from a sustainable economy.

A solid first half demonstrates Impax’s ability to trade successfully in choppier markets. It added 6% to AUM to £13.3bn in the period, then another £0.4bn in April. An above-forecast 36% increase in the interim dividend reflects confidence in the underlying outlook, cash generation and enhanced competitive positioning. Fourteen consecutive quarters of positive net inflows reinforces an already strong investment case.

Its business is cash generative with a progressive dividend policy.  The interim payment backs a 1.9% prospective yield, supported by management’s stated intention to review its distribution policy this year. Based on our forecast 3.5p/share final FY19e payment, dividends have more than doubled over the last three years.

The operation is highly scalable, and costs are closely controlled. AUM growth can be absorbed with limited additional expense, so margins should build progressively. Management holds 30% of the equity, well aligned with external investors. 

Impax has navigated uncertain global stock markets very effectively.  At this stage we’ve held our £14bn full year AUM forecast i.e. another c £300m net inflow over the final five months vs c £400m in April. We will revisit that as month end AUM updates are released. 

The medium-term outlook is under-pinned by new mandates, the growing importance of sustainability and environmental, social and governance (ESG) factors to global investors. We expect that combination to continue to drive AUM growth, EPS and dividends, and further attractive returns for investors.
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Strong Q2 AUM update underpins FY19e

Published: 8th April 2019
Excellent AUM growth for the three months to end March 2019 comprised net inflows of £0.5bn into its funds plus £1.2bn of market performance gains.

For now, at least, we have held our forecasts. A slightly cautious approach reflecting recent volatile global equity markets: the latter make us reluctant to read too much into one, albeit very encouraging, quarter. Q1 was relatively weak and total AUM growth for the first six months was 6%. The US operation reported a small £15m net inflow in Q2 19 vs a £227m outflow in Q1. We shall revisit projections on the back of AUM updates over the next few months. 

Nonetheless, the sheer scale of a 14.7% increase in Q2 AUM was impressive.  We anticipate further inflows into equity funds in the second half, which supports our £14.4bn September 2019 AUM forecast i.e. assumes c 9% net AUM growth in H2 2019. 

That provides considerable underpinning for our current year forecast and reinforces the longer-term attractions of both the sustainable segment that Impax leads, and of value in its own shares.

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Forecasts trimmed, attractions intact

Published: 20th February 2019
Impax is a market-leading manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally.

Our FY19e AUM projections (update 14 December 2018) assumed steady underlying net inflows to existing and funds and flat y-o-y investment performance.  In the event, Impax’s end December AUM update revealed a £0.96bn fall in total AUM during Q1, from £12.52bn to £11.56bn. 

A strong January saw a 4.9% recovery in a single month to £12.12bn. That is unquestionably encouraging, but perhaps still leaves Impax with too much ground to make up in the next eight months to achieve our £14.5bn AUM forecast. We have therefore trimmed the latter to £14.0bn, and total fee income, operating profit and EPS now reflect the recent volatile market conditions.

In Q1, the UK funds were up £0.54bn, ahead of forecast, but their performance was offset by a £0.23bn net withdrawal reported by the Group’s US operation. Market movement, FX and performance knocked another £1.32bn off the total. Some £0.56bn of the £0.96bn aggregate AUM decline in Q1 was recovered in January. 

A more volatile investment environment has not changed our view on the fundamental strengths of Impax’s unique proposition. The latter remains intact and we believe current measures (PER, yield, EV/NOPAT) materially undervalue the business’s potential for total shareholder returns or its growing appeal to an acquisitive Fund Management major as ‘best in class’ in an increasingly important segment.

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Not your average asset manager

Published: 14th December 2018
Impax is a market leading manager of both listed and private equity funds, which invest in companies and technologies that contribute to the transition to a more sustainable global economy. 

The key impetus remains an increasingly urgent need for products and services that encourage the transition to a more sustainable global economy. That’s a distinct, specialist investment class, with massive scale and genuine growth potential.  Impax is amongst the world’s leading investors in companies and industries specifically positioned to make that transition happen. It capitalises upon a recent dramatic increase in demand for ways to tackle the consequences of a more crowded planet, backed by awareness that climate change represents both an acute risk and, with expert guidance, a considerable investment opportunity. 

FY18 results were impressively robust and the outlook is positive. The main drivers pivot on an expanding global population, rising living standards, natural resource constraints and climate change. Even in less supportive equity markets that should drive investment as the individual funds perform. 

Looking forward, we forecast total AUM of £14.4bn (end FY19e) and £16.5bn (FY20e). In a more uncertain political and market backdrop we have assumed that the underlying investment performance will be neutral.

A 20 years track-record confirms Impax’s ability to grow AUM across market cycles. Recent growth has created a world leader in a fast-growing investment speciality. The operation is scalable and operationally geared, has broad competencies and global profile. That has positive implications for earnings and, as a unique asset itself, the group could attract consolidation interest in the future.

NB you can view a detailed (30 min) interview about the FY results and outlook with Ian Simm, CEO, and Charlie Ridge, CFO, here:

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Full Year Results Interview 2018

Published: 7th December 2018
Ian Simm, Founder & CEO and Charlie Ridge, CFO, discuss the last 12 months of trading and Impax's outlook going forward

Q4 above forecast, underpins strong outlook

Published: 18th October 2018
Impax is a market leading manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally. 

The group’s Q4 update confirmed that a transformational year (AUM +72%) finished well, with another 6% growth in AUM during the final three months to £12.5bn at end September 2018. That was above our forecast and comprised a £334m net inflow, boosted by £534m of investment performance/FX. 

Aggregate growth was driven by an acquisition, completed in January, creating Impax AM LLC. The latter finished FY18 at £3.04bn AUM. It has moved ahead since purchase, and Impax expects  operational synergies to become apparent over the next two to three years. 

AUM growth managed by Impax’s UK thematic funds was 33% y-o-y, from £6.79bn to £9.02bn, and 11% in Q4 alone. In aggregate, c 77% of overall AUM growth reported during FY18 (c £1.72bn) comprised net client inflows. 

We have held our end FY19e AUM forecast at £14.4bn. That assumes net inflows by the UK operation in line with FY18 at £1.75bn, US ahead (+£0.3bn) and neutral investment performance for both. Private funds relate entirely to NEF3, and FY18e PBT/EPS includes one material one-off in respect of the carried interest received post completion of exits from investments in NEF2.

In the short-term, we see revenues and EPS driven by momentum behind net inflows, cross-selling product portfolios to existing clients, operational synergies and improved scale. 

Recent market-led volatility does not change the core message, which is that demand for Impax’s specific skillset will continue to gather pace on the back of accelerating recognition that the global economy needs to transition to a more sustainable growth model. 

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Still motoring ahead

Published: 14th June 2018

After three years of super-charged growth in assets under management (AUM) – from £2.8bn to £11.0bn at the end of March 2018 – there are few signs of any slowdown. Impax grew AUM by c £1bn in the first half, all organic and has already added another £0.8bn in the first two months of H2. 

The Pax acquisition (now Impax Asset Management LLC) completed in January was the main event in H1. The group expects to see material benefits from reciprocal cross sales over the next two to three years. Short-term synergies may be derived from shared research and investment strategies, and integration of back/middle offices. Two independent investment teams already share research and analytical information. 

AUM hit our previous full year forecast just eight months into FY18.  We’ve pushed it up to £12.4bn (£12bn listed equity) which assumes another £0.7bn net inward investment into listed equity funds and neutral fund market performance during the remaining four months of this year. Impax closed its latest private equity fund (NEF3) at €357m in May, while the success of NEF2 (initial fund size €333m) contributed £3.2m (net of bonus and tax) in carried interest payments in May 2018, post the year end.

The interim dividend was better than forecast at 1.1p/share (H117: 0.7p), and the carried interest from NEF 2 funded a 2.6p/share special dividend. Excluding that, the shares currently yield 2.1%, rising to a twice-covered 2.6% in FY 2019. Our AUM projection puts EV/AUM at 2.1% by current year end.

In addition to AUM growth, key valuation messages pivot on integration of the acquired US operation, the success of efforts to cross-sell respective product portfolios into existing client bases, and the impact of operational synergies and improved scale on margins. 

We continue to see Impax as ideally placed to benefit from a fast-evolving landscape for investment managers, progressively dividing between larger passive investors and specialist boutiques. 

NB the recent full interview with CEO Ian Simm can be accessed from the note pdf
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Interview with CEO post results

Published: 11th June 2018
CEO Ian Simm discusses the recent interim results and exciting outlook for Impax AM. 

Making one plus one equal three

Published: 15th March 2018
Impax is a market leading manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally. Aggregate AUM at end January 2018 was £11.225bn.  

We have updated and added FY19e forecasts post completion of Impax’s acquisition of US-based Pax World Management LLC. In addition to greater scale reflected in the £11.225bn end January AUM, that extended Impax’s product portfolio, marketing reach and client base.  We expect an immediate boost to adjusted EPS net of (a) the cost of servicing new debt secured to finance the acquisition and (b) an issue of 2.66m new shares at 170p. 

Margins should progressively benefit from increased scale and a broader, more diversified AUM base. We estimate that as at end January 2018, Pax, since renamed Impax Asset Management LLC (IAM LLC), represented c 32% of the enlarged group’s AUM and generated just under 40% of its ongoing run-rate revenue. We have, however, assumed no benefit from cost savings or synergies, as neither was part of the rationale for the acquisition; but see potential for efficiency gains. 

Potential EPS enhancement is better than we initially projected. Fewer consideration shares were issued and FY18 PER is 17x vs 20x at announcement. The acquisition terms were assisted by favourable GBP/USD, although this is a sensitivity for Impax’s enlarged USD revenue base included in our forecasts. Current forecast end FY18 EV is 1.79% of AUM (£11.225bn at end January), falling to 1.68% based on our end FY18 AUM estimate. 

Dividend growth is well covered by forecast EPS/cash generation. Projected FY18 cover is 3.2x vs 2.2x (FY17), net of cost of servicing new debt and scheduled amortisation. We assume 25% dividend growth for this year and FY19e, below the 38% increase in FY17. That is deliberately conservative.

Revenues may be affected by stock market volatility, but AUM growth momentum and the impending closure of the latest Private Equity fund drive fee income short term. Beyond that, we regard the combination as a potential sea change in group prospects, as Impax leverages its experience as an institutional fund manager to drive its acquired US institutional operation and offer new products to its existing client base.

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Delivering a sustainable future

Published: 4th December 2017
Impax is a market leading manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally. 

The Group has just reported outstanding FY17 results and a positive start to FY18.  Momentum is being driven by organic growth and the proposed combination with US-based Pax World Management LLC, set to complete in Q1 2018. The underlying outlook remains compelling: record 61% growth in assets under management or advice (AUM) in FY17 included c £2.1bn of net inflows and £0.65bn from fund performance. Total year-end AUM was £7.3bn (FY16: £4.5bn), or £10.3bn including Pax.

Strong growth in fee income and operating margins - revenue and adjusted operating profit (excluding non-recurring items) up 55% and 121% respectively - followed further outperformance by Impax’s principal listed equity strategies (each has outperformed the global benchmark over one, three and five years) and a positive start by the new renewable energy private equity fund. Net inflows well spread by geographic source, confirm that Impax’s  direct marketing and distribution partners have traction in key markets across the USA and Europe.  

We expect the addition of Pax to enhance EPS from FY19.  Impax’s recent share price performance means that the share based consideration should be priced above the 110p we’d assumed, so would be less dilutive. Impax’s valuation still appears undemanding relative to prospects: well supported by AUM growth, fee income and cash generation; underpinned by further potential from a broadened offer / distribution and cross sale opportunities.

NB you can see last week’s  presentation by the CEO, Ian Simm, on the results and outlook at this address:

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Investor Forum November 2017

Published: 30th November 2017
Ian Simm, CEO, runs through the Group's FY results presentation

Impax Asset Management Webinar

Published: 22nd October 2017
Ian Simm, CEO, and Charlie Ridge, CFO, run through Impax's proposed plans for their acquisition of Pax World Management LLC.

No trumping AUM growth

Published: 11th June 2017
Impax is a market leading manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally.

With the addition of £500m to AUM, Impax closed another strong month. That brought total AUM to £6.5bn, c 8% growth in May, and recent momentum (from £4.2bn at end Sep 2016) suggests that efforts to build the scale and profile of Group funds and investment expertise in target markets have gained traction. We have again pushed up our FY17e revenues and earnings forecasts to reflect higher projected fees on the back of a revised AUM target of £7.0bn by end September,

We don’t regard President Trump’s decision to withdraw the US from the Paris Climate Agreement as a significant impediment to Group ambitions, while management anticipates relatively superficial effects on both investment returns and potential demand for renewables. Existing regulatory mechanisms will continue to provide growth drivers for environmental solutions, supported by the economic benefit of reduced energy use and associated CO2 emissions.

All other countries remain firmly on board and many US states have since confirmed their individual intentions to fulfil their country’s commitment. Indeed there is still broad consensus regarding the need to maintain investment in renewables and other initiatives to improve water and air quality. Environmental market demand is increasingly based on economics, not subsidies: so, as the cost of renewables falls, they have become increasingly competitive alternatives to natural gas and coal-fired energy without subsidies.  

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Earnings driven by strong momentum

Published: 15th May 2017

Impax is a market leading manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally.   

Impressive first half earnings were 23% up on the second half of FY’16 (100% ahead of H1’16). That reflects six consecutive quarters of strong growth in assets under management and advisory (AUM). Total net inflow was a record £870m in the first half, equivalent to a 27% increase in AUM to £5.7bn by end March, while another very good month pushed that above £6.0bn by end April. The interim figure included $1bn for North America, an important medium term milestone.

We have upgraded both our FY17, and FY18 AUM forecasts, as Impax has already hit our previous target with five months remaining. Furthermore, the outlook remains positive since the robust performance by all group investment strategies underpin its profile as a leading global investor in environmental markets. It continues to attract attention from institutional investors in the UK, Continental Europe and the US.

The drivers which helped AUM double over the last two years remain intact. The financial model is cash generative, benefits from a declining cost ratio/improving operating margin. That will finance seed investment in new funds, possibly acquisitions, but also increases in dividends and the pay-out ratio, which we regard as relatively conservative, despite the latest, 40% increase in the interim distribution.

Impax’s team culture means no dependence on ‘star’ fund managers (whose departure might result in loss of assets) and its core investment focus is in strong demand from investors. Yet its stock-market value is just 2.2% of AUM that are themselves growing rapidly.

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View the Results Webinar

Published: 11th May 2017
You can now hear Ian Simm, Chief Executive, and Charlie Ridge, Chief Financial Officer, present the interim results for the six months to 31 March 2017 on behalf of Impax Asset Management Group plc.

To view simply click on the video below.

A genuinely transformational acquisition

Published: 28th September 2017
Impax looks to have secured an acquisition which delivers key components of its longer term strategic growth plan in one fell swoop, while minimising execution risk, and enhancing EPS and dividend cover. 

It has agreed to acquire 100% of US based Pax World Management LLC for US$52.5m initially, plus up to US$37.5m in contingent payments payable in 2021, subject to performance. This combines complementary businesses with aligned strategies and business cultures, and a successful partnership for over a decade on the design and management of the US$511m Pax Global Environmental Markets (GEM) Fund. 

The acquisition extends Impax’s profile as a specialist manager in a rapidly growing niche. Scale benefits are predicated on enlarged product range, coverage, strategies, client base and marketing reach, rather than cost savings or rationalisation. It plans to run the investment teams independently (with some exchange of ideas for best practice) and progressively build collaboration, and more rapidly integrate some support functions. 

Impax has agreed a keen purchase price based on underlying revenue/EBITDA run rate, below its valuation just prior to the announcement, without assumed benefits from cost savings or synergies. On that basis Pax will enhance EPS in the first full year, by above our forecast if Impax’s higher share price holds as it will result in less dilution, and the acquired entity continues to perform in a vibrant market.

A further benefit lies in the longer-term potential delivery of a step-change in AUM growth rates and profitability. The existing partnership helps make Pax a known quantity with a similar business culture, complementary products, services and market profile. We still expect progressive distributions despite the use of cash/debt towards this transaction, with potential for strong positive cash generation to compensate. 

Despite strong gains, Impax shares still seem attractively priced relative to prospects. 
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View the Results Webinar

Published: 14th December 2016
You can now hear Ian Simm, Chief Executive, and Charlie Ridge, Chief Financial Officer, present the recently announced record results for year ended 30 September 2016 on behalf of Impax Asset Management Group plc.

To view simply click on the video below.

Impax Asset Management Group plc - Equity Development Investor Forum, November 2016

Published: 2nd December 2016
Ian Simm, Chief Executive, describes how Impax is well positioned for future growth.

Upgrades post strong Q2 AUM growth

Published: 10th April 2017
Impax is a market leading manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally. 

An impressive first half saw total assets under discretionary and advisory management (AUM) hit a new £5.7bn peak at end March 2017. As that’s already above our existing full-year target with six months still to go, we have upgraded FY17e AUM to £6.0bn and £6.8bn by end FY18.

We still see those as relatively conservative vs 27% first half growth i.e. c 5% net new inflows in H2, c 2% from investment performance, and reductions in scale of the group’s older private equity funds as they exit investments.  We assume limited contribution from the latest PE renewable infrastructure fund in its initial funding phase, but anticipate another upgrade later in the year as fund raising is completed.

Growth in gross AUM, respectively 12.4% and 12.9% in each of the first two quarters reflects momentum behind key drivers for Impax’s listed investments. We interpret this as evidence of the group’s growing profile as a prime source of expertise in an area of increasing importance to global investors, and traction in key markets. 

The first two quarters saw net inflows to listed equity funds equivalent to 8.3% and 9.3% across Q1 and Q2, and respectively +2.0% and +5.6% investment performance. The impact on fee income is reflected in our higher revenue and earnings forecasts.

Despite a strong recent run which puts the shares on a more demanding rating we see our FY17e AUM target as conservative as it assumes £0.27m of listed equity net inflows in H2 vs £0.78m in H1 and nothing from private equity. Indeed, given scope for continued AUM accumulation, strong fund performance in its chosen space and potential for high margin private equity growth to result in further upgrades, the valuation remains attractive vs short term prospects.

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Environmental leadership driving growth

Published: 28th November 2016

Impax is a market leading manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally. Aggregate AUM at end September 2016 was £4.5bn. 

Investment decisions are based on proprietary and rigorous investment process, designed to take advantage of trends being driven by better resource efficiency and solutions to environmental problems. Long-term drivers remain compelling, and the group’s funds are diversified geographically and by environmental market sector. 

Significant FY16 AUM growth reflects benign equity markets as a whole but encouragingly for Impax we particularly note: (a) fund outperformance vs global benchmarks and (b) net fund inflows of £0.5bn during the last financial year.

Intriguingly, these encouraging growth prospects do not appear reflected in the historical valuation of Impax shares vs other quoted specialist fund management groups. Based upon consensus forecasts, the current rating is 8.1 x EV/NOPAT (EV c 1%. of AUM) with a 3.7% yield (2015-16), covered 1.5 times.

On 1st December the group will release results for the year ended 30 September 2016. This will not only bring an up to date report on financial and corporate progress, but also an insight as to how the company sees its own outlook. On 30th November Ian Simm, CEO, will present at the ED Investor Forum.  
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Strong Q1: AUM and profit upgrades

Published: 16th January 2017

Impax is a market leading manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally. 

We have revised our fee income and profit forecasts to reflect recent momentum behind growth in assets under discretionary/advisory management (AUM) which hit a new peak of £5.06bn at the end of 2016 (FY16: £4.8bn). A 12% increase over the quarter puts Impax well on track to achieve our existing £5.4bn end September 2017 AUM forecast. 

AUM is a key valuation metric and recent periods have seen impressive growth from £3.1bn (Q1 16) to £5.1bn (Q1 17). We expect further progress out to the end of FY18, but would still be comfortable with some volatility in a net measure i.e. which includes client withdrawals. The group has two older private equity funds which are effectively in wind-down, where profitable exits/client distributions would be regarded as positive.

The group reported record inflows into its listed equity funds during the quarter, driven by Continental European and North American clients, and confirming that the momentum achieved in the second half of FY16 has been maintained this year. Our projections puts the shares on an 11.7x FY17 EV/NOPAT multiple, and EV/AUM (Q1) of 1.2%, backed by a well-covered 4.1% dividend yield.

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