Impax Asset Management is a specialist asset manager which seeks out investment opportunities arising from the transition to a more sustainable global economy. With around $40bn in assets under management, the UK-based manager is one of the world's largest investment firms dedicated to sustainable investment.
We spoke to Ian Simm, Impax Asset Management's founder and CEO, about the growing global demand for sustainable investments and the importance of the UK market in green finance.
What does your company do?
We are investment managers managing money for pension funds, private savers and sovereign wealth funds from all around the world. We have a pretty unusual focus as all our work is dedicated to the transition towards a sustainable economy. We are investment management specialists focused on the environmental or green sector.
We have been in business since 1998 when I founded the company and today, with about $40bn under management, we are one of the world's largest dedicated investment managers in this area.
We run a dozen investment portfolios which are reflected in about 70 different funds and accounts around the world. Those portfolios comprise investments in areas like clean energy, water treatment, recycling, sustainable food and energy efficiency, amongst other things. We invest in both listed companies and private companies. We are a major funder of new power generation projects across Europe.
Tell us about your UK and global operations.
We have approximately 200 staff of which around 60 of these are fund managers or analysts. 40% of our staff are based in the US and we also have small offices in Hong Kong and Dublin. Over half of our staff are based in London. We are a UK headquartered business.
The UK is definitely seen globally as a leader in green policy or sustainable development policy so being right at the centre of that conversation has been very helpful
What are the benefits of being UK based?
The UK is a great place for talent and for investment management expertise. We've been able to build up a very experienced and successful team because of our London base.
Secondly, the financial markets infrastructure in London has been really helpful. There is a large choice of lawyers, accountants and advisers of all sorts which we would not have had such ready access to if we were somewhere else.
Thirdly, we have been on the Alternative Investment Market (AIM) [the UK's junior stock exchange] since 2001. Having that stock market listing has been pretty helpful. In the early years, as a relatively small company, Aim gave us visibility and a profile through the broking research that we wouldn't otherwise have got.
The UK is definitely seen globally as a leader in green policy or sustainable development policy so being right at the centre of that conversation has been very helpful.
We have 85% of our clients from outside the UK in markets such as Japan, Australia and California. Client wins have been helped by the fact that we're seen as coming from a rock solid high quality financial market even when at the start we were a relatively unknown brand. The UK's reputation as a global centre for investment management is very well established and understood.
Client wins have been helped by the fact that we're seen as coming from a rock solid high quality financial market even when at the start we were a relatively unknown brand. The UK's reputation as a global centre for investment management is very well established and understood
What are your company's growth ambitions and how does the UK feature in these?
We are just three years into integrating a major acquisition in the US following our purchase of Pax World Management in 2017. We have big ambitions for growth in continental Europe and Asia as well and the UK has been very buoyant too.
We are in a very fortunate position as there is strong growth potential all around the world. This is being driven by pension funds and other institutional investors seeing great growth opportunities in markets linked to sustainable development as well as by many retail investors who are wanting to get exposure to these areas either to make money or to reflect their own values. Coupled with this, there are a wealth of new business ideas and business opportunities to invest in.
What are some of the challenges from Brexit?
We do have 45% of our business coming from continental Europe and we have had to set up a subsidiary in Ireland to manage that business rather than lose it. So we have been hiring rather rapidly in Dublin in the last 12 months. Those are jobs we would have probably created in the UK had Brexit not happened. Post Brexit, we have no choice so we have decided to establish Dublin as a strategic centre.
That has posed challenges for us in having to build up a team from scratch pretty quickly in a relatively small city.
What about Covid-19?
We've seen an acceleration of business, notwithstanding the problems of Covid. It is hard to say, but maybe Covid has shown to some prospective clients the need to think about resilient portfolios. So funds which mitigate climate change risk were maybe a little more attractive than they might otherwise have been.