Impax Asset Management Group Plc · LSE:IPX
Impax Asset Management — FY2021 Earnings Presentation
46 slides from Impax Asset Management's earnings presentation, December 2021
Slide 1: Results for the year ended 30th September 2021
Investing in the transition to a more sustainable economy Results for the year ended 30th September 2021
Slide 2: Agenda
Agenda Ian Simm Charlie Ridge • Highlights and Business update Founder & Chief Executive Chief Financial Officer • Financial update • Appendix and background to the Company 2
Slide 3: 2021 highlights
2021 highlights AUM increased Highly Strong Strong platform 84% to £37.2bn attractive investment for further & record net market performance expansion inflows of context £10.7bn1 1As at 30 September 2021. Assets under advice represent ~2% of total AUM. 3
Slide 4: Financial performance
Financial performance1 FINANCIAL HIGHLIGHTS ASSETS UNDER MANAGEMENT (£bn)² 2021 37.2 143.1 Revenues (£m) 87.5 2020 20.2 Adjusted 55.8 operating profit (£m) 3 23.3 SHAREHOLDERS’ EQUITY (£m) Adjusted 54.0 profit before 2021 110.5 tax (£m) 22.2 Adjusted 33.9 2020 71.5 diluted earnings per share (pence)
Slide 5: Highly attractive market context
Highly attractive market context • Macro drivers supporting transition to a more sustainable economy ― Policy announcements e.g. COP26 climate conference; Biden infrastructure bill ― “Build back better” focus on the net-zero transition following COVID-19 • Expanding investment opportunities ― Demand
Slide 6: Strong and diversified growth across channel and geographies
Strong and diversified growth across channel and geographies • UK and Ireland ― Segregated account and second mandate for St James’s Place (Global Opportunities) ― Impax Environmental Markets plc £1.4bn in total net assets, up 64.3% ― Irish UCITS funds’ AUM reached £2.1bn, up 160.1% • Europe and Asi
Slide 7: Breakdown of AUM increase (£bn)
Breakdown of AUM increase (£bn) 30-Sep-21 37.2 Outflows (2.9) Inflows 6.8 Market movement 3.3 £38.9bn AUM as at 31-Mar-21 30.0 31 October 2021 Outflows (2.1) Inflows 8.9 Market movement 3.1 30-Sep-20 20.2 7
Slide 8: Environmental Markets Strategies performance versus benchmark
Environmental Markets Strategies performance (%) versus benchmark1,2 Leaders3 – AUM £8,296m Specialists – AUM £4,060m Water – AUM £6,489m Leaders Specialists Water 106.2 116.1 MSCI ACWI 94.0 MSCI ACWI MSCI ACWI 79.0 79.0 79.0 74.8 62.7 54.9 38.0 40.5 33.4 38.0 38.0 24.2 22.2 22.2 22.2 1 year 3 year
Slide 9: Sustainability Lens Strategies performance versus benchmark
Sustainability Lens Strategies performance (%) versus benchmark Global Opportunities1 – AUM £6,480m2,3 US Large Cap – AUM US$1,400m4,5 US Small Cap– AUM US$657m5,6 Global Opportunites US Large Cap US Small Cap 118.3 87.9 MSCI ACWI 121.5 Russell 2000 Index S&P 500 Index 77.1 79.0 73.4 59.2 61.4 56.1
Slide 10: Well diversified AUM, by strategy, geography and client type
Well diversified AUM, by strategy, geography and client type AUM BY STRATEGY1 AUM BY REGION International Sustainable Others, 9% Global Women's Economy, 2% UK / Ireland, 25% Leadership, 2% North America, 25% Leaders, 22% US Large Cap, 3% Sustainable Food, 4% Asian Enviornmental, 5% Asia Pacific, 2%
Slide 11: Movement in net inflows – breakdown by channel (£m)
Movement in net inflows – breakdown by channel (£m) FUNDS SUB-MANAGED FOR BNP OTHER EMEA UK/IRELAND PARIBAS ASSET MANAGEMENT DISTRIBUTORS/FUNDS SEDCO, ASN Bank, Formuepleje 177 908 735 62 Irish UCITS platform Aqua Segregated accounts 169 269 303 (18) (72) 1,607 Other (55) Global Environment 192 64 I
Slide 12: Extending the foundations for expansion in North America
Extending the foundations for expansion in North America Finalisation of acquisition of AUM evolution of acquired business (US$bn) Pax World Management (Jan 2021) • Acquired remaining 16.7% from management in Feb 2021 Jan Jan-18 20181 4.9 • Management total consideration, net of loans, US$3.0m (US$1
Slide 13: Investment strategies and products: scope for further growth
Investment strategies and products: scope for further growth Expanding our existing strategies • Significant capacity headroom • Expansion of direct sales teams ongoing Developing new products • Successful track record of developing and launching new investment strategies • Seeded Asian Opportunitie
Slide 14: People, systems and infrastructure
People, systems and infrastructure Investing in our people • Post-Covid: office-based, but with greater flexibility • Employee survey: engagement score 88%; 96% response rate • Headcount grew 24% to 216 permanent employees • Team build-out in Dublin: established as strategic EU centre, post-Brexit •
Slide 15: Financial update
Financial update
Slide 16: Financial highlights – 64% revenue growth
Financial highlights – 64% revenue growth REVENUE (£m) WEIGHTED AVERAGE FEE MARGIN (bps) 51 47 2021 143.1 Performance 120.6 22.5 2020 2021 run rate: run rate: Net flows 87.5 33.1 48 bps 47 bps 2020 87.5 2020 2021 NET FLOWS & ANNUALISED NET NEW REVENUE (ANNR) Net Flows ANNR £bn £m 2020 4.5 18.0 2021
Slide 17: Financial highlights – revenue diversification
Financial highlights – revenue diversification REVENUE BY STRATEGY REVENUE BY CLIENT DOMICILE UK/Ireland, North 26% Others, 13% America, Leaders, 24% 35% International Sustainable Economy, 2% Global Women's Leadership, 2% Asia Pacific, 1% EMEA, 38% US Large Cap, 4% Sustainable Food, 3% Asian Environ
Slide 18: Financial highlights – operating expenses: investment to support growth
Financial highlights – operating expenses: investment to support growth ADJUSTED¹ OPERATING EXPENSES (£m) TOTAL STAFF (AVERAGE) 2021 62 133 195 2021 87.3 Variable staff costs 68.9 18.4 2020 57 114 171 Fixed staff costs 65.6 3.3 Investment Staff Other Staff Non-staff costs 64.2 1.4 September headcoun
Slide 19: Financial highlights – 140% operating profit increase
Financial highlights – 140% operating profit increase, boosted by operational gearing OPERATING PROFIT (£m) OPERATING MARGIN 2021 55.8 2021 39.0% 2020 23.3 2020 26.6% OPERATIONAL GEARING TREND OPERATING PROFIT PER AVERAGE STAFF (£000) (£m) 160 45% 140 40% 2021 286 120 35% 100 30% 25% 80 2020 136 20%
Slide 20: Financial highlights – strong cash generation; 140% increase in total dividend
Financial highlights – strong cash generation; 140% increase in total dividend DIVIDEND (p) CASH MOVEMENTS¹ (£m) CAPITAL RESOURCES (£m) 46.9 46.9 2021 3.6 17.0 4 20.6 2021 70.1 Other cash (1.5) Capital 2020 1.8 6.8 8.6 movements 18.1 buffer Pax Acquisition (0.7) 2019 1.5 4.0 5.5 39.3 Net Net seeding
Slide 21: IPX shareholder register
IPX shareholder register IPX SHARES SEPTEMBER 2021 (m) DILUTION • Issued 2.2m shares; 2.0m to the EBT for restricted IPX shares in issue 132.6 share awards or settling option exercises and 0.2m in respect of the acquisition of the remaining Impax NH Net EBT purchased to date (4.1) Net IPX shares 128
Slide 22: Outlook
Outlook Attractive Established, Authenticity investment diversified Experienced, and strong skills/ distribution resilient team brand strategies network Potential for Supportive Accelerating scaling and market allocations by developing drivers asset owners capabilities 22
Slide 23: Appendix
Appendix
Slide 24: Acquisition transaction summary
Acquisition transaction summary On 18 January 2018 Impax completed the purchase of Pax World Management LLC (renamed Impax Asset Management LLC, here referred to as ‘Impax NH’) ― 83.3 per cent from majority shareholder and others ― 16.7 per cent from Pax Management in 2021 under put/call arrangement
Slide 25: Adjusted IFRS performance measures
Adjusted IFRS performance measures IFRS PBT TO ADJUSTED PBT (£m) As a result of the acquisition, certain financial performance measures have been prepared on an adjusted basis. Adjusted PBT 54.0 ‘Adjusted’ financial metrics are shown after removing the effects of primarily: Contingent consideration
Slide 26: Additional information
Additional information SHARE AWARDS OUTSTANDING1 INVESTMENTS END OF PRINCIPAL INVESTMENTS % OF FUND NUMBER THEME COMMENTS AWARDS VESTING DATE EXERCISE FUNDS/INVESTEE (£M) AUM OUTSTANDING PERIOD Asian Impax Asian 1.8 100% Opportunities Opportunities Dec-21/22, Feb- RSS 3,322,834 Global Women’s 23/24/
Slide 27: Background to the Company
Background to the Company
Slide 28: Impax Asset Management - overview
Impax Asset Management - overview • Specialist manager, over 20 years’ experience Systematic strategies, £0.9bn Private Markets, £0.3bn Gender Lens, £0.7bn • 66 investment team members Sustainability Lens, £9.3bn • Global distribution and client relations £37.2bn • High-quality investment solutions
Slide 29: Our strategic priorities
Our strategic priorities Deliver superior, risk Optimise existing & Enhance client Widen & deepen adjusted investment selectively launch experience beyond distribution channels returns new strategies investment returns Build insights & Deliver excellent Increase operational Attract & develop advocac
Slide 30: The rapidly-changing landscape for investment managers
The rapidly-changing landscape for investment managers IMPAX WELL MAINSTREAM TRENDS A FORMULA FOR WINNERS POSITIONED • Pressure on generalists “Specialist” approach P • Increasingly complex regulatory environment Differentiated strategies P • Growing fee pressure on generic products Diversified inco
Slide 31: Strong track record of growth – assets under management at year end
Strong track record of growth – assets under management at year end (£m) 1998 15 1999 20 2000 39 2001 38 2002 55 2003 66 2004 69 2005 214 2006 429 2007 982 2008 1,099 2009 1,265 2010 1,823 2011 1,896 2012 1,828 2013 2,197 2014 2,755 2015 2,823 2016 4,502 2017 7,261 2018 12,515 2019 15,051 2020 20,18
Slide 32: Global distribution
Global distribution North America Desjardins AM (Canada) FÉRIQUE (Canada) Mackenzie Investments (Canada) NEI Investments (Canada) Delaware Fund Pax World Funds Europe ASN Bank BNP Paribas Asset Management Formuepleje St. James’s Place IEM plc Impax (Ireland) Funds UCITS Impax New Energy Funds Asia-P
Slide 33: Our investment solutions: underpinned by proprietary tools
Our investment solutions: underpinned by proprietary tools Environmental Sustainability Gender Sustainable Multi-Asset Markets Lens Lens Infrastructure Sustainable Allocation Active Equity Active Equity Systematic Equity Systematic Equity Private Markets 1971 Specialists Global Opportunities US Sust
Slide 34: NEF III status
NEF III status 39MW • €233 million invested and committed in a diversified portfolio: + 18MW3 ― Twelve investments in eight countries across four technologies ― Four development platforms ― First investment in an adjacent sector: battery storage 0MW + • Over 100% invested, committed and reserved for
Slide 35: Global Opportunities: annual disclosure presentation – GBP
Global Opportunities: annual disclosure presentation – GBP Benchmark 3yr Total Firm Assets Composite Assets Number of Annual Gross Annual Benchmark Asset Weighted 3yr Annualized Std Annualized Std Year (Millions) (Millions) Portfolios Return Annual Net Return Return StdDev* Dev** Dev** 2020 24,154.2
Slide 36: Specialists: annual disclosure presentation – GBP
Specialists: annual disclosure presentation – GBP MSCI AC World 3yr FTSE ET 3yr Total Firm Assets Composite Assets Number of Annual Gross MSCI AC World Asset Weighted 3yr Annualized Std Annualized Std Annualized Std Year (Millions) (Millions) Portfolios¹ Return Annual Net Return Return FTSE ET Retur
Slide 37: Specialists: annual disclosure presentation cont. – 2021
Specialists: annual disclosure presentation cont. – 2021 Calculation Methodology performance returns was only applicable to Impax Asset Management, whilst since November 2018 the highest fee Returns are calculated using the asset-weighted method and individual portfolios are revalued daily or monthl
Slide 38: Leaders: annual disclosure presentation – GBP
Leaders: annual disclosure presentation – GBP Total Firm Assets Composite Assets Number of Annual Gross Annual Net MSCI AC World Asset Weighted 3yr Annualized MSCI AC World 3yr FTSE EOAS 3yr Year (Millions) (Millions) Portfolios Return Return Return FTSE EOAS Return StdDev* Std Dev** Annualized Std
Slide 39: Asian Environmental: annual disclosure presentation – GBP
Asian Environmental: annual disclosure presentation – GBP MSCI AC AP 3yr FTSE EO AP 3yr Total Firm Assets Composite Assets Number of Annual Gross Asset Weighted 3yr Annualized Std Annualized Std Annualized Std Year (Millions) (Millions) Portfolios Return Annual Net Return MSCI AC AP Return FTSE EO A
Slide 40: Water: annual disclosure presentation – GBP
Water: annual disclosure presentation – GBP FTSE EO Water 3yr MSCI AC World FTSE EO Water Total Firm Assets Composite Assets Number of Annual Gross MSCI AC World Technology Annual Asset Weighted Annualized 3yr Annualized Technology 3yr Year (Millions) (Millions) Portfolios¹ Return Annual Net Return
Slide 41: Sustainable Food: annual disclosure presentation – GBP
Sustainable Food: annual disclosure presentation – GBP Benchmark 3yr Total Firm Assets Composite Assets Number of Annual Gross Annual Benchmark Asset Weighted 3yr Annualized Std Annualized Std Year (Millions) (Millions) Portfolios Return Annual Net Return Return StdDev* Dev** Dev** 2020 24,154.28 82
Slide 42: Impax US Large Cap Strategy
Impax US Large Cap Strategy IMPAX US LARGE CAP as of STRATEGY 12/31/2020 ANNUAL PERFORMANCE TOTAL RETURN TOTAL RETURN ASSET TOTAL FIRM ASSETS COMPOSITE ASSETS GROSS OF FEES S&P 500 INDEX WEIGHTED STD COMPOSITE 3 YEAR BENCHMARK 3 NUMBER OF YEAR (USD) (MILLIONS)* (USD)(MILLIONS) (%) NET OF FEES (%) (%
Slide 43: Impax US Small Cap Strategy
Impax US Small Cap Strategy IMPAX US SMALL CAP STRATEGY RUSSELL 2000 - ANNUAL RUSSELL NET RETURN 3YR TOTAL FIRM ASSETS COMPOSITE ASSETS NUMBER OF ANNUAL GROSS ANNUAL NET 2000 - NET RETURN ASSET WEIGHTED 3yr annualized std ANNUALIZED STD YEAR (MILLIONS)* (MILLIONS) PORTFOLIOS RETURN RETURN RETURN STD
Slide 44: Impax Core Bond Strategy Disclosures
Impax Core Bond Strategy Disclosures IMPAX CORE BOND STRATEGY as of 12/31/2020 ANNUAL PERFORMANCE ASSET COMPOSITE TOTAL FIRM ASSETS (USD) COMPOSITE ASSETS TOTAL RETURN TOTAL RETURN BLOOMBERG BARCLAYS US WEIGHTED 3 YEAR BENCHMARK NUMBER OF YEAR (MILLIONS)* (USD)(MILLIONS) GROSS OF FEES (%) NET OF FEE
Slide 45: Impax High Yield Bond Strategy disclosures
Impax High Yield Bond Strategy disclosures IMPAX HIGH YIELD BOND STRATEGY as of 12/31/2020 ANNUAL PERFORMANCE TOTAL FIRM ASSETS COMPOSITE ASSETS TOTAL RETURN TOTAL RETURN ICE BOFA MERRILL LYNCH US ASSET WEIGHTED COMPOSITE 3 BENCHMARK 3 NUMBER OF YEAR (USD) (MILLIONS)* (USD) (MILLIONS) GROSS OF FEES
Slide 46: Important information
Important information Disclaimer The information contained in this confidential document (the “Paper”) has been prepared and issued by and is the sole responsibility of the Impax Asset Management Group plc, whose shares are quoted on AIM. Impax Asset Management Group plc is registered in England & W
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