Impax Asset Management Group plc · LSE:IPX
Impax Asset Management — H1 2018 Earnings Presentation
38 slides from Impax Asset Management's earnings presentation, 2018
Slide 1: Impax Asset Management Group plc Interim results
Impax Asset Management Group plc The specialist asset manager focused on a more sustainable global economy Interim results for six months to 31 March 2018
Slide 2: Agenda
Agenda • H1 2018 highlights Ian Simm Charlie Ridge Founder & Chief Executive Chief Financial Officer • Background to the Company • H1 2018 business update • H1 2018 financial update • Milestones and prospects 2
Slide 3: H1 2018 highlights
H1 2018 highlights AUM up 52% Robust investment Net inflows of to £11.0bn2. performance in Closing of Pax £1bn and strong Increasing to Listed Equity and acquisition1 mandate pipeline £11.8bn at Private Equity 31 May 2018 1On 18 January 2018 Impax Asset Management Group plc acquired Pax World Manage
Slide 4: Financial performance
Financial performance1 H1 2018 H2 2017 H1 2017 3 Assets under management2 £11.0bn £7.3bn £5.7bn Revenue £25.7m £18.7m £13.9m Adjusted operating earnings4 £7.7m £5.7m £3.6m Adjusted profit before tax £7.4m £5.7m £3.0m Adjusted diluted earnings per share 4.83p 3.94p 1.94p Shareholders’ equity £47.8m £
Slide 5: Background to the Company
Background to the Company 5
Slide 6: Impax Asset Management
Impax Asset Management £7.6bn Thematic Equities £1.2bn Unconstrained Equities The specialist investment manager focused on the transition to a more £926m Smart Beta £11.0bn sustainable economy AUM1 £804m Fixed Income £481m Real Assets London managed // US managed2 2017 UNPRI assessment: A+ Policies,
Slide 7: The rapidly changing landscape for investment managers
The rapidly changing landscape for investment managers MAINSTREAM TRENDS A FORMULA FOR WINNERS IMPAX WELL POSITIONED • Pressure on generalists “Specialist” approach P • Increasingly complex regulatory environment Differentiated strategies P • Growing fee pressure on generic products Diversified inco
Slide 8: Solid track record of growth
Solid track record of growth AUM FYE £m 1998 15 1999 20 Phase 1: Establishing the business 2000 39 2001 38 2002 55 2003 66 2004 69 2005 214 Phase 2: 2006 429 Scale up to critical mass 2007 982 2008 1,099 2009 1,265 2010 1,823 Phase 3: 2011 1,896 Consolidation & investment 2012 1,828 2013 2,197 2014
Slide 9: Transitions to a more sustainable economy
Transitions to a more sustainable economy COMBUSTION CLEAN ENERGY ELECTRIC ENGINE TRANSITION VEHICLES PROCESSED HEALTH & WELLNESS NATURAL FOOD TRANSITION INGREDIENTS TRANSITION TO LIFESTYLE DIAGNOSTIC PERSONALISED MEDICAL TOOLS DRUGS CARE Source: Shutterstock/Unsplash. 9
Slide 10: Strong growth prospects (examples)
Strong growth prospects (examples) Global population living with water scarcity1 Global population suffering from diabetes Number of people (billions)2 Number of people (millions)3 2015 3 2017 424 2050 5 2040 642 Global clean vehicle sales Global clean power generation Number (millions)4 As % of tot
Slide 11: Investment solutions across asset classes
Investment solutions across asset classes Impax Asset Management Group plc London managed US managed Asset class Strategy Inception date Asset class Strategy Inception date Specialists 2002 US Equity Small Cap 2008 Unconstrained Equities US Equity Medium Cap 2016 Leaders 2008 Total AUM: £1.2bn US Eq
Slide 12: Our offices and distribution partners
Our offices and distribution partners North America UK/Ireland Pax World Funds IEM plc Delaware funds platform UCITS platform NEI Investments NEF Funds1 Desjardins Global Asset Management Mackenzie Investments London Portland Asia Pacific Portsmouth BNP Paribas in Hong Kong and Australia New York Eu
Slide 13: H1 2018 business update
H1 2018 business update 13
Slide 14: Acquisition of Pax World Management LLC
Acquisition of Pax World Management LLC • On 18 January 2018 Impax completed the purchase of Pax World Management LLC (renamed Impax Asset Management LLC known as ‘Impax LLC’)1 • Initial implied value (100% of shares) of $52.5m with contingent value of up to $37.5m payable in 2021 • Impax purchased
Slide 15: AUM growth in Europe and North America
AUM growth in Europe and North America Breakdown by client domicile (£m) PRINCIPAL FUNDS/PARTNERS 802 Impax Environmental Markets plc UK/Ireland 831 Irish UCITS Platform Absalon Capital 4,898 ASN Bank IPX not including LLC EMEA 5,532 BNP Paribas Asset Management 68 Asia-Pacific BNP Paribas Investmen
Slide 16: Breakdown of AUM increase
Breakdown of AUM increase LONDON MANAGED (LISTED WEIGHTED AVERAGE REVENUE EQUITY) FUNDS (£m) MARGIN1 (bps) IMPAX LLC: PAX WORLD FUNDS (£m) 31 March 2018 7,634 31 March 2018 3,398 Market movement (160) H1 2018 52.3 Inflows 1,500 Market movement (105) Outflows (493) 30 September 2017 6,787 H2 2017 54.
Slide 17: Integration of Impax Asset Management LLC
Integration of Impax Asset Management LLC • Investment teams ― Will not be integrated ― Channels established to exchange ideas/best practice • Client service and business development ― Teams have collaborated since 2008 ― New CSBD Committee established to co-ordinate activity • Support teams ― Aimin
Slide 18: Private Equity Infrastructure
Private Equity Infrastructure NEF ll • Over 95% of total value of portfolio now realised • Excellent performance track record € € • Impax has reserved £3.2m net payments from € carried interest 105MW NEF III € • Final close on 31 May 2018 € € € • Capital commitments of €357m 78MW € € € € 48MW € • In
Slide 19: H1 2018 financial update
H1 2018 financial update 19
Slide 20: Adjusted IFRS performance measures
Adjusted IFRS performance measures As a result of the acquisition, certain financial performance measures have been prepared on an adjusted basis. “Adjusted” financial metrics are shown after removing the effects of primarily: • Acquisition costs incurred as part of the transaction; • Amortisation (
Slide 21: Financial highlights: Operating performance
Financial highlights Operating performance REVENUE (£m) OPERATING COSTS (adjusted1) (£m) H1 2018 21.2 4.5 25.7 H1 2018 11.2 3.4 1.5 1.9 18.0 IAM LLC 4.5 Private Equity PPS 0.2 and financing fees H2 2017 10.2 2.8 13.0 Listed Equity flows 2.3 and performance H2 2017 18.7 Impax LTD H1 2017 7.8 2.5 10.3
Slide 22: Financial highlights (2): Earnings and dividends
Financial highlights (2) Earnings and dividends ADJUSTED DILUTED EPS (p) DIVIDEND (p) 2018 1.1 2.6 H1 2018 4.83 2017 0.7 2.2 2.9 Share award dilution (0.12) 2016 0.5 1.6 2.1 2015 0.4 1.2 1.6 0.5 Tax adjustments (0.22) 2014 0.3 1.1 1.4 Interest (0.18) 2013 0.9 Interim Fair value investments and FX (0
Slide 23: Financial highlights (3): Balance sheet
Financial highlights (3) Balance sheet SEGMENTAL BALANCE SHEET¹ CASH MOVEMENTS1 (£M) Impax Ltd Impax LLC Consolidated £’000 £’000 £’000 31 March 2018 8.6 Goodwill 13,347 - 13,347 Repayment of bank borrowing (6.3) Intangibles 24,776 - 24,776 Net cash on acquisition of Net cash on acquisition of (24.4
Slide 24: Financial highlights (4): Cash and long-term trends
Financial highlights (4) Cash and long-term trends CASH RESERVE ANALYSIS (£M) AVERAGE NUMBER OF EMPLOYEES Impax Ltd 31 March Impax Ltd 31 March 2018 8.6 81 2018 31 March 2018 Risk buffer (7.5) Impax LtdLtd Impax 30 September 2017 73 30 September 2017 "Available" cash 1.1 Private Private equity equit
Slide 25: IPX shareholder register
IPX shareholder register Significant staff ownership IPX SHARES (m) POTENTIAL DILUTION (IN 2021) Pre acquisition • Management equity: 1.4m1 shares would be issued to acquire 127.7 the 16.7% of Impax LLC owned by management through put/call options. Bonus Issued to Pax issue vendors 2.7 • Potential a
Slide 26: Milestones and prospects
Milestones and prospects 26
Slide 27: Impax's strong position
Impax’s strong position Acknowledged Attractive Established global brand investment distribution leader skills/strategies network Potential for Scope to Building further develop/add shareholder scaling new capabilities value 27
Slide 28: Appendix
Appendix 28
Slide 29: The transition to a more sustainable economy
The transition to a more sustainable economy FROM… TO… A depletive A sustainable economic model economic model • TECHNOLOGY Financial returns by • REGULATION Growth with improved externalising social and societal and environmental costs • CUSTOMER PREFERENCES environmental outcomes • SOCIAL FACTORS
Slide 30: Impax Asset Management Group plc structure
Impax Asset Management Group plc structure1 Pre–acquisition Post closing of Pax acquisition Impax Asset Impax Asset Management Group Management Group Plc Plc Impax Asset Impax Asset Impax Asset Impax Asset Management (AIFM) Management (AIFM) IAM US Holdco, Inc. Management Ltd Management Ltd Ltd Ltd
Slide 31: Listed Strategies: strong performance record
Listed Strategies: strong performance record USD Percentage increase to 31 March 2018 Strategies 1 year 3 years 5 years MSCI ACWI Benchmark 14.8 26.4 55.3 Specialists Active 18.0 42.4 74.9 Leaders Active 16.6 34.2 66.2 Asia-Pacific Active 17.8 30.2 67.0 Water Active 17.3 43.3 79.8 Food & Agriculture
Slide 32: Acquisition transaction summary
Acquisition transaction summary On 18 January 2018 Impax completed the purchase of Pax World Management LLC (renamed Impax Asset Management LLC and known as ‘Impax LLC’) – 83.3 per cent from majority shareholder and others – 16.7 per cent from Pax Management in 2021 under put/call arrangements – Ini
Slide 33: Income analysis
IFRS Adjusted for Adjusted for Income analysis Six months ended Six months ended Six months ended March March March 2018 2018 2018 Income statement £'000 £'000 £'000 Comments on adjustments Revenue 25,680 - 25,680 Operating costs (19,932) 1,980 (17,952) Acquisition costs, amortisation of intangibles
Slide 34: Additional information
Additional information SHARE AWARDS OUTSTANDING INVESTMENTS End of % of Number Vesting date exercise Principal Investments Awards Theme Fund Comments outstanding period funds/investee (£m) AUM Impax 2012 ESOP 850,000 Vested 31/12/2018 Leaders Environmental 4.5 24% Leaders 2013 ESOP 1,016,000 Vested
Slide 35: Specialists: annual disclosure presentation
Specialists: annual disclosure presentation March 2018 - USD MSCI ACWI 3yr FTSE ET 3yr Total Firm Assets Ending Market Annual Gross MSCI ACWI Annual FTSE ET Annual Asset Weighted 3yr Annualized Std Year Number of Portfolios Annual Net Return Annualized Std Annualized Std (Millions) Value (Millions)
Slide 36: Leaders: annual disclosure presentation
Leaders: annual disclosure presentation March 2018 - USD MSCI ACWI 3yr FTSE EO All-Share Total Firm Assets Ending Market Annual Gross MSCI ACWI Annual FTSE EO All-Share Asset Weighted 3yr Annualized Std Year (millions) Number of Accounts Annual Net Return Annualized Std 3yr Annualized Std Value (Mil
Slide 37: Water: annual disclosure presentation
Water: annual disclosure presentation March 2018 - USD FTSE EO Water FTSE EO Water MSCI ACWI 3yr Total Firm Assets Ending Market Annual Gross MSCI ACWI Annual Asset Weighted 3yr Annualized Std Technology 3yr Year Number of Portfolios Annual Net Return Technology Annual Annualized Std (Millions) Valu
Slide 38: Important information
Important information This document has been Issued in the UK by Impax Asset Management Group plc, whose shares are quoted on AIM. Impax Asset Management Group plc is registered in England & Wales, number 03262305. Impax Asset Management Group plc is the parent company of Impax Asset Management Limi
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