Impax Environmental Markets (IEM ) is reshuffling its investment team once again as manager Jon Forster steps back just six months after Bruce Jenkyn-Jones announced his retirement.

The £872m trust, which has suffered in recent years from both its small-cap and environmental focus, has updated its manager line-up, with both its long-term managers no longer working on the fund.

The retirement of Jenkyn-Jones, who was one of Impax Asset Management’s first employees and had run the trust since launch in 2002, was announced in April, with Forster – who has worked on the trust since 2024 - set to take over the running of the fund with Fotis Chatzimichalakis as co-manager.

However, an update to the stock market confirmed a new direction, with Chatzimichalakis now being joined by Sanjeev Lakhani as co-manager.

The announce states that Forster will ‘take on the responsibility of a senior industrials analyst focused on environmental solutions companies’.

‘In this new role, he will continue to contribute to IEM’s idea generation and broader investment process,’ said the board.

‘Forster will work closely with the managers to ensure a smooth transfer of his portfolio management responsibilities, before handing over fully on 31 December.’

The trust confirmed to Citywire that the board had been assessing the ‘structure around IEM’s portfolio management team’ as part of a wider review of the investment process.

Glen Suarez, chair of IEM, said Sanjeev’s appointment was part of the review process, alongside a new benchmark. 

‘This refreshed approach combines Impax’s deep expertise in the fundamentals of environmental solutions companies with a new benchmark that provides a clearer framework for portfolio construction, risk management and performance assessment,’ he said. 

‘We believe these changes will bring fresh impetus to the portfolio and enable the new portfolio management team to be in a better position to outperform and serve the best interests of shareholders.’

Chatzimichalakis has worked on the portfolio since 2021 while Sanjeev joined Impax Asset Management in 2023 as a senior industrials analyst.

The board is no doubt hoping the new management duo will be able to turnaround performance, which has been a source of disappointment for investors over the past five years.

Although environmental stocks soared during the Covid pandemic, the years since have been harder going, which is reflected in IEM’s returns.

Over one year, the net asset value (NAV) is down 0.4% while the shares gained just 1.9% versus a 10% rise in the FTSE ET100, which represents the 100 largest pure-play environmental technology companies globally.

Over five years, the fund falls even further behind, with the NAV rising just 33.8% and the shares up 19.4%, while the index has gained 62%. One of the biggest detractors for IEM has been its lack of exposure to electric vehicle giant Tesla, which is 10% of the index.

The fund is, however, no longer pegging itself against the FTSE ET100 as ‘it has become unrepresentative of IEM’s opportunity set since the FTSE’s environmental markets methodology diverged from that of Impax in 2021’.

Instead, the trust is adopting the Solactive Global Environmental Markets Specialists index, known as GEMS.

Suarez said the index has ‘been created to understand and measure IEM’s performance, positioning and risk relative to the investable opportunity set’.

He said it would also allow shareholders to ‘understand the structure and performance of IEM’s thematic opportunity set against broader global equity markets’.

The trust will continue to use the MSCI All Country World to benchmark its performance in the broader global equity market. However, it has also fallen short on this measure, with the index rising 16.8% over one year and 57% over five years.

Suarez said consultation with shareholders over the benchmark means he is ‘confident’ the GEMS index will better reflect the ‘thematic investable universe’ covered by IEM.

‘This will give the manager a clear reference for portfolio construction, risk management and performance attribution,’ he said.