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ESG-focused Impax grows assets despite almost £1bn in outflows

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UKSIF warned that while there was a strong appetite to invest in green energy, the hard part was convincing that cash to come to the UK.
UKSIF warned that while there was a strong appetite to invest in green energy, the hard part was convincing that cash to come to the UK.

Assets under management (AUM) at Impax Asset Manaegment swelled by nearly five per cent in the first quarter of the year despite the fund reporting outflows.

Positive market movements helped the AIM-listed investor, which specialises in environmental and sustainability investments, to grow its AUM by 4.6 per cent in the three months to December.

In a statement to the market, the firm reported that total AUM climbed to £39.1bn at 30 December, up from £37.4bn at the end of September.

This came despite the firm reporting nearly £1bn in outflows.

“Although asset allocation decisions at some of our wholesale clients have led to net outflows this quarter, we’ve retained all our material client accounts and added some significant new ones, particularly in Europe,” Ian Simm, chief executive said.

Impax has been hit by the shift away from ESG over the past couple of years, with its share price down over 60 per cent since its peak at the end of December 2021.

The strong performance of oil and gas firms after the war in Ukraine, a growing political backlash and regulatory issues have all made investors question the ‘ESG’ label.

Over 2022 investors pulled more money from sustainable funds than they put in for the first time in a decade.

More recent data suggests the outflows have not finished. Data from the Investment Association showed that nearly £448m was pulled out of ESG funds by retail investors in August last month, the third month of continuous outflows.

Last year Impax suffered from this. In the year ending 30 September, the asset manager reported that pretax profit had fallen more than 28 per cent to £52.1m.

But Simm remained confident going forward, citing hopes that economies were accelerating the transition.

“We have a healthy pipeline of potential new business and see encouraging signs that the transition to a more sustainable economy is accelerating in many areas,” he said.

The firm also announced this morning that has agreed to acquire the assets of Absalon Corporate Credit, a fixed income manager in Copenhagen. At the end of December, Absalon’s AUM stood at around £351m.

Simm said the deal was “an important step in the continued enhancement of our fixed income offering”. After the deal, the combined global team will have fixed income AUM of around £1.6bn.