Shares in Impax Asset Management (IPX) plunged 25% today after investors reacted to further outflows from the sustainable investment group worsened by the impending loss of Impax Environmental Markets (IEM).

IPX dropped 31.4p to 94.2p, close to a nine-year low, on news that just over £2bn had been withdrawn from Impax funds in the first quarter of the year, cutting assets under management (AUM) to £19.3bn from £21.2bn in December. 

Chief executive Ian Simm added to the gloom by flagging the likely loss of most of the £894m of assets in Impax Environmental Markets investment trust as it holds an “exit tender” to enable shareholders to get out and avoid the risk of a takeover by Saba Capital, the activist hedge fund with a 22% stake. 

Simm said Impax aimed to retain a “meaningful percentage” of those assets by offering a switch to the open-ended version of the London-listed fund. That may be a challenge, however, as the investment trust’s board has refrained from recommending or offering a rollover into the sister fund. 

He also warned that revenue for the current year to September would fall to £109m to £113m compared to £178m three years ago, with further steps being taken to cut costs. 

Higher inflation and interest rates combined with a backlash against embedding environmental, social and governance (ESG) concerns in investing have hurt Impax and other thematic investors since 2022. 

Impax’ AUM has slumped from £37.2bn in September 2024 with outflows of £13bn in the last financial year including the loss of a £5.2bn mandate with St James Place. 

Simm said the group was not surprised to see net outflows continue from a small number of institutions given the poor three-year performance of its funds, including IEM. However, he said the latest quarter – the second in its financial year – had been “more favourable” and Impax funds holding over 63% of assets had outperformed despite the recent market turbulence caused by the war in the Middle East. 

“Longer term, the fundamentals that underpin our investment thesis continue to strengthen, particularly in the areas of renewable energy and energy efficiency, key components of energy security, which is already a priority globally in light of the currently elevated geopolitical tension,” he said.

This is a point that Glen Suarez, chair of Impax Environmental Markets also made in a video interview with QuotedData this week in which he urged shareholders to vote for the 100% tender offer, subject of an extraordinary general meeting next Thursday. 

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