ESG-focused Impax Asset Management has seen continued net outflows into 2024 as investors withdraw from sustainable funds, while its investment performance drove growth in assets under management (AuM).
Impax reported £2.7bn in net outflows for the six months to 31 March 2024, which it said came largely from its European wholesale channel.
Chief executive Ian Simm said these clients had “rotated to a more ‘risk-off’ stance amid a higher interest rate environment”.
He added that Impax’s institutional channel remained “robust” and had seen “an increase in the net number of institutional accounts due to some significant new client wins”.
The strong performance of oil and gas firms after the war in Ukraine and regulatory issues have made investors question the ‘environmental, social and governance’ label in recent years.
Analysts have said the sector has likely reached a “saturation point” after years of investors scrambling to pump cash into responsible investment strategies.
Impax’s most recent annual results showed a 28 per cent drop in pretax profit to £52.1m, also driven by rising costs.
On Wednesday, the firm posted a 5.9 per cent rise in AuM to £39.6bn over the six months. However, Impax’s AuM remains slightly down from £40.1bn a year prior.
The firm pinned the recent increase on a “positive impact” of £4.9bn from its investment performance, market movement and foreign exchange.
Simm said the rise in AuM was “commendable” and that Impax had seen “positive progress against our strategic priorities and careful management of our cost base”.
“Following nearly two years of relative headwinds, asset owner sentiment around the transition to a more sustainable economy and associated areas of Impax expertise has improved in recent months,” he added.
“We believe that companies providing innovative solutions that address environmental and social challenges remain compelling. Over the long run, we believe these companies can benefit from rising demand for their products and services and deliver strong earnings growth.”
Impax also announced an interim dividend of 4.7p per share, unchanged from last year.