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Impax Asset Management Group‘s (LSE:IPX) a specialist fund manager focusing on the transition to a more sustainable global economy. It invests exclusively in companies and projects providing climate solutions. But its share price has come under pressure lately.
Since September 2020, it’s fallen 65% and it’s now (20 September) 87% below its five-year high achieved in December 2021.
What’s going on?
At the end of its financial year in September 2021 (FY21), the company had assets under management (AUM) of £37.2bn. But its most recent market update (30 June) shows these had fallen to £26.1bn. Most of the outflow in funds occurred during the first few months of 2025 with the group’s clients withdrawing a net amount of £10.2bn.
The company diplomatically explained: “Investors struggled to interpret the decisions of the new US administration”.
Over the second quarter of FY25, AUM increased by £800m, although this was helped by the acquisition of £1.1bn of funds from Sky Harbor Capital Management. Outflows during the three months to 30 June were £1.3bn.
Falling AUM means fewer opportunities to generate revenue. In common with most in the industry, Impax earns fixed management fees and performance-related bonuses. The impact of fewer funds to manage can be seen from the group’s results for the first six months of FY25. Revenue was 11.3% lower than for the same period in FY24 and adjusted diluted earnings per share fell 21.3%.
Is it good for income?
Over the past three financial years (FY22-24), the company’s been able to maintain its dividend at 27.6p a share.
However, lower earnings during the first half of FY25 has resulted in a cut of 15% to its interim dividend. Even so, based on amounts paid over the past 12 months, the stock’s still yielding 15.2%. This makes it the most generous on the Alternative Investment Market, where shares typically offer more potential for capital growth rather than generous levels of income. But yields at this level could be a sign that investors are expecting its dividend to be cut again.
And there are reasons why I believe this could happen. There appears to be a cooling towards sustainable investments. Governments around the world — most notably in the US — are rowing back on their previous commitments to move to Net Zero. The direction of travel is still towards a cleaner world but it’s likely to take longer than initially planned.
Also, investors are increasingly attracted to managing their own portfolios — or simply buying investments that track specific indexes — rather than relying on active fund managers like Impax.
Against this backdrop, the decline in the company’s AUM worries me.
Final thoughts
But it’s not all doom and gloom. The business is likely to benefit from the recent (relative) stability in global stock markets and it has no debt to service.
It also has a 25-year track record of identifying sustainable investment opportunities and, even taking into account the recent fall, has massively increased the size of the funds it manages.
However, the fall in the group’s share price is a concern. Its AUM was relatively stable from the end of FY21 through until 2024. And yet the Impax share price still fell.
For this reason, taking a position is too risky for me.
