Impax Asset Management has reported a big jump in pre-tax profits, even as the environmental, social and governance-focused investing sector comes under pressure with accusations of greenwashing and recent market volatility.
The sustainable investment specialist unveiled a 56 per cent rise in pre-tax profit for the six months to March, to £32.7mn, compared with the same period a year earlier, despite turbulence in global markets.
Impax, which was set up more than two decades ago and focuses on environmental investing, received net inflows of £2.5bn bringing its total assets under management to £38bn.
“Our investment approach, with its careful attention to risk and resilience, continues to attract asset owners that are seeking to build robust portfolios with attractive returns, focused on the transition to a more sustainable economy,” said chief executive Ian Simm.
The majority of new money flowed into Impax’s equity strategies, though these posted a £1.6bn loss. Fixed-income strategies received £48mn in net new money.
“Amid considerable market volatility surrounding recent geopolitical events, we continue to be pleased with the long-term performance of our investment strategies,” Simm said.
The strong showing comes against a background of market turbulence, which has hit many larger ESG funds that tend to have a heavy weighting towards technology, one of the worst-hit sectors since the start of the year.
Sustainable funds also are inclined to hold fewer energy stocks given concerns about the sector’s contribution to emissions. However, these companies have been among the big winners this year with a rise in energy prices following Russia’s invasion of Ukraine.
The Aim-listed fund manager said: “Recent geopolitical events underscore the importance of energy security and tackling climate change, both key areas for Impax’s investments.”
The sustainable investment sector is also coming under wider scrutiny over its marketing efforts. The chief executive of Germany’s top asset management company DWS Group on Wednesday resigned hours after the company’s offices in Frankfurt were raided by police over allegations of greenwashing.
Revenues at Impax rose 46 per cent to £88.6mn in the period. The company’s dividend also increased to 4.7p a share from 3.6p in the same period a year ago.
However, the rises were not enough to boost Impax’s share price. The stock fell 9.6 per cent on Wednesday, increasing its fall so far this year to more than 48 per cent.
