Responsible Investor

Impax: the UK fund manager blazing a green trail

Annual AUM growth of 25% in the last five years as environmental specialism pays off.

These are tough times for fund managers. But in the green investment space, Impax, the London-based environmental specialist, is in good shape. In October, the group reported a £201m (€252.6m) increase in assets in a pre-close statement for the year to September 18, to pass the £1bn mark at £1.18bn in assets under management and advisory. In September, Impax won a £35m mandate from the £1.5bn UK Environment Agency Pension Fund, one of the leading schemes for sustainable investment. And in a sign that environmental investing is no longer considered niche in the City, the group hired Charlie Ridge, former chief financial officer of Deutsche Bank’s UK asset and wealth management business, as its chief operating officer. Ian Simm, Impax’s chief executive officer, believes 14 years of dedication to the environmental space – 10 managing money – are paying off. He says Impax is now a scaleable, specialist combination of listed and private equity funds. Broadly speaking, the private equity side is dedicated to infrastructure such as the building of solar and wind projects, while the quoted funds invest in environmental suppliers such as equipment and maintenance companies. The manager runs money for over 100 institutional investors, notably in the UK, but

increasingly overseas. That coverage was extended to 20 new countries in one go in December 2007 when French fund manager BNP Paribas Investment Partners increased a small existing stake in Impax to 29.4%. Simm says the deal came about after Impax approached BNP, for whom it was already running money on the French manager’s Parworld funds platform, regarding an overhang of stock for which it was seeking a long-term investor. “At the time, BNP had equity stakes in 17 fund managers and the potential for distribution was very appealing for us. BNP decided to buy the overhang shares and more to take their stake to 29.4%. We also signed a distribution agreement for them to sell our funds in continental Europe and Asia. BNP see this as a natural compliment to their other capabilities.” Since signing the deal, BNP has launched the Parvest Global Environment fund, for which Impax does the stock selection. The BNP tie-up is not exclusive. Impax has a similar distribution relationship with Japanese equity fund manager DIAM, which also holds 5% of Impax shares. “Besides BNP, we are still 70% owned by other shareholders,” says Simm. As well as carrying out the research for a suite of environmental indices via a joint venture with FTSE, Impax has also recently launched a

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