Impax Asset Management Group Plc has recently encountered significant financial challenges, highlighted by the loss of a £5.2 billion ($6.3 billion) mandate from St. James’s Place Plc. This development, announced in mid-December 2024, has resulted in an 8% decrease in the firm's total assets under management, bringing them down to approximately $40 billion. Following this news, Impax's market value plummeted by nearly 25%, and the company's share price has fallen over 80% since the end of 2021 [f52b9f59].
CEO Ian Simm acknowledged the risks associated with losing such mandates and emphasized the importance of adapting to changing market conditions. The firm has seen a notable decline in its bonus pool for fiscal year 2024, which was reported to be 11% lower than in 2023. Analysts are predicting £6.8 billion in net organic redemptions in the first half of 2025, following over $850 million in outflows from the U.S. last year [f52b9f59].
Despite these setbacks, Simm remains optimistic about the future, asserting that growing awareness of climate change will continue to influence investment habits. Impax is currently exploring opportunities in U.S. companies that focus on infrastructure resilience, aiming to align with sustainable investing trends [f52b9f59].
In a broader context, the company had previously been viewed as a potential opportunity for passive income and green investing. Analysts had noted that the stock was selling at a significant discount, with estimates suggesting it could be 60% undervalued based on discounted cash flow analysis. However, the recent loss of the mandate has raised concerns about the sustainability of its dividend payouts, which had been at 78% of earnings [9ec78d56].
The Financial Mail on Sunday had previously recommended shares of Impax Environmental Markets, highlighting its investments in companies addressing environmental challenges. However, the current financial landscape poses new challenges for the firm as it navigates through these turbulent times [1341312d].
According to QuotedData, Impax Environmental Markets (IEM) aims to invest in innovative solutions for environmental challenges, focusing on core themes such as clean energy and sustainable food. The trust's managers believe that the demand for the products and services in IEM's portfolio remains resilient despite recent market sell-offs. Nonetheless, the widening discount on IEM's shares and the management's decision to buy back shares to enhance NAV for ongoing shareholders reflect the need for strategic adjustments in light of the recent developments [f0d281cf].