ESG-focused Impax Asset Management has reported a fall in profit and continued outflows but said Donald Trump’s return to the White House could help its portfolios deliver “excellent returns”.
The London-listed firm said on Thursday that its pretax profit came in at £49m for the year ending on 30 September, down six per cent from a year earlier.
Its adjusted operating profit also dropped 9.3 per cent to £52.7m, with revenue falling to £170.1m from £178.4m.
Impax’s share price has tumbled almost 40 per cent so far this year.
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 had likely reached a “saturation point” after years of investors scrambling to pump cash into responsible investment strategies.
Impax was hit by net outflows of £5.8bn over the 12 months, although this was an improvement on the £92m in withdrawals seen the year before.
Chief executive Ian Simm said the outflows reflected “a challenging environment for active asset managers” and that withdrawals mainly stemmed from Impax’s European wholesale channel over the first three quarters of the year.
Its assets under management (AUM) remained broadly flat at £37.2bn, compared to £37.4bn in 2023.
Impax reported a positive absolute contribution of £5.3bn from the investment performance of the funds and accounts it manages.
In July, Impax agreed to acquire fixed-income firm SKY Harbor Capital Management, which it expects to add roughly £1.3bn to AUM around the end of this year.
Trump tenure ‘likely to be positive’
“This was a year of positioning the business for further growth,” Simm said.
“Expectations of a ‘soft landing’ for the US economy should underpin improved investor confidence, while stable risk sentiment should lead investors to look beyond the narrow range of stocks (including those in artificial intelligence and obesity drugs) that have driven the performance of global indices for much of the past 18 months.”
Simm argued that Trump’s victory in the US election should provide a further boost to Impax next year.
“Experience from the first Trump administration suggests that the next four years are likely to be positive for US-based businesses delivering innovative products and services and in which materials and energy efficiency are significant contributors,” he said.
“Against this backdrop, we are confident that our investment portfolios can deliver excellent returns for clients.”