Impax Asset Management Group Plc · LSE:IPX
Impax Asset Management — H1 2021 Earnings Presentation
48 slides from Impax Asset Management's earnings presentation, May 2021
Slide 1: Interim results for six months to 31 March 2021
Interim results for six months to 31 March 2021 The specialist asset manager focused on a more sustainable economy
Slide 2: Agenda
Agenda Ian Simm Charlie Ridge • Highlights and Business update Founder & Chief Executive Chief Financial Officer • Financial update • Background to the Company 2
Slide 3: H1 2021 highlights
H1 2021 highlights AUM increased Strong investment Completed integration of Solid platform for 49% to £30.0bn1 performance and Pax World further expansion record net inflows of £6.8bn Management 1As at 31 March 2021. Assets under advice represent ~2% of total AUM. 3
Slide 4: Financial performance
Financial performance1 FINANCIAL HIGHLIGHTS ASSETS UNDER MANAGEMENT (£bn)² H1 2021 30.0 60.6 £32.2bn AUM H2 2020 20.2 as at Revenue (£m) 46.3 30 April 2021 41.2 H1 2020 14.4 20.7 SHAREHOLDERS’ EQUITY (£m) Adjusted operating 12.8 H1 2021 81.1 profit (£m)³ 10.5 H2 2020 71.5 18.7 Adjusted profit H1 202
Slide 5: Attractive market context
Attractive market context • Drivers strengthening transition to a more sustainable economy ― Policy announcements e.g. Biden infrastructure; UK decarbonisation ― Pressure on oil/gas companies to reduce exploration capex ― “Build back better” and the economic and social challenges following COVID-19
Slide 6: Diversified growth across channel and geographies
Diversified growth across channel and geographies • UK and Ireland ― Second mandate for St James’s Place (Global Opportunities) ― Irish UCITS funds’ AUM hit £1.5bn • Continental Europe ― Robust pipeline and strong flows, particularly from Scandinavia • Asia-Pacific ― New distribution agreement with
Slide 7: Investment performance: Environmental Markets
Investment performance: Environmental Markets¹ Performance to 31 March 2021 in GBP (%)1 Annualised 1 Year 3 Years 5 Years Specialists 69.5 18.9 18.6 Leaders 53.1 16.0 16.7 Water 51.1 16.4 17.1 Asian Environmental2 55.1 14.4 16.4 Sustainable Food 46.7 11.7 11.6 Climate 63.9 19.6 - MSCI ACWI 38.9 12.7
Slide 8: Investment performance: Sustainability Lens
Investment performance: Sustainability Lens¹ Performance to 31 March 2021 (%)1 Annualised 1 Year 3 Years 5 Years Global Opportunities2 37.2 17.2 18.5 MSCI ACWI2 38.9 12.7 14.1 US Large Cap Fund3 67.0 21.0 - S&P 500 Index3 56.4 16.8 16.3 High Yield Strategy3 20.2 7.4 8.6 ICE BofAML US Cash Pay High Y
Slide 9: Breakdown of AUM increase (£m)
Breakdown of AUM increase (£m) 31-Mar-21 29,999 Market movement 3,005 Inflows 8,947 Outflows (2,136) £32.2bn AUM as at 30-Sep-20 20,183 30 April 2021 Market movement 4,157 Inflows 3,280 Outflows (1,662) 31-Mar-20 14,408 Data as at 31 March 2021. 9
Slide 10: AUM breakdown
AUM breakdown AUM BY STRATEGY1 AUM BY REGION Core Bond, 2% Other, 7% Specialists, 12% North America, Global 29% Opportunities, 15% UK/Ireland, 16% Climate, 8% Leaders, 25% Asia-Pacific, 1% Global Women's Leadership, 2% Sustainable Food, Asian Environmental, 4% 4% EMEA, US Large Cap, 3% Water, 18% 54
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, 96 Formuepleje / SEB / ASN 565 330 Formuepleje 11 Aqua Irish UCITS platform Segregated accounts 154 213 -44 76 Other 20 1,083 58 Global Env
Slide 12: Finalisation of acquisition of Impax NH (formerly Pax World Management)
Finalisation of acquisition of Impax NH (formerly Pax World Management) Finalisation of acquisition Pax World Fund AUM evolution from acquisition (US$bn) • Acquired remaining 16.7% of Pax World Management from management in Feb 2021 Jan Jan-18 20181 4.9 • Total consideration, net of loans, US$3.0m (
Slide 13: People, systems and infrastructure
People, systems and infrastructure Investing in our people • Post-Covid: office-based, but with greater flexibility • Recent staff survey: 96% response rate; engagement score 88% • Headcount grew 10% in the Period to 192 permanent employees • Team build-out in Dublin: established as strategic EU cen
Slide 14: Investment strategies and products: scope for further growth
Investment strategies and products: scope for further growth Expanding our existing strategies • Significant capacity headroom, except Specialists • Global distribution network, planning for increased direct sales Developing new products • Successful track record of developing and launching new inve
Slide 15: Financial update
Financial update
Slide 16: Financial highlights
Financial highlights REVENUE (£m) REVENUE BY CLIENT/FUND DOMICILE Other 3% UK 18% H1 2021 60.6 North America 37% Ireland 6% Performance 4.1 France 10% Net flows 10.2 Netherlands 3% Luxembourg 23% H2 2020 46.3 WEIGHTED AVERAGE FEE MARGIN (bps) 141 139 H1 2021 H2 2020 H1 2020 41.2 47 49 44 43 • March
Slide 17: Financial highlights – operating expenses
Financial highlights – operating expenses ADJUSTED¹ OPERATING EXPENSES (£m) OPERATING PROFIT (£m) OPERATING MARGIN H1 H1 H1 10.3 12.4 17.1 39.8 20.7 34.2% 2021 2021 2021 H2 H2 H2 9.6 12.0 12.0 33.6 12.8 27.7% 2020 2020 2020 H1 H1 H1 10.1 11.5 9.0 30.6 10.5 25.5% 2020 2020 2020 Non-staff costs Fixed
Slide 18: Financial highlights – trends
Financial highlights – trends TOTAL STAFF (AVERAGE) NUMBER OF INVESTMENT STAFF (AVERAGE) H1 2021 188 H1 2021 61 H2 2020 171 H2 2020 57 FIXED EMPLOYEE COST PER EMPLOYEE (£’000) AUM PER INVESTMENT STAFF (£m) H1 2021 66 H1 2021 492 H2 2020 70 H2 2020 354 Data as at 31 March 2021. 18
Slide 19: Financial highlights - earnings and dividends
Financial highlights - earnings and dividends ADJUSTED DILUTED EPS (p) DIVIDEND (p) 2021 3.6 H1 2021 11.8 2020 1.8 6.8 8.6 Other effects (0.1) 2019 1.5 4.0 5.5 2018 1.1 3.0 4.1 2.6 Foreign exchange losses (1.2) 2017 0.7 2.2 2.9 Tax (1.3) 2016 0.5 1.6 2.1 2015 0.4 1.2 1.6 0.5 Operating profit 6.2 201
Slide 20: Financial highlights - balance sheet
Financial highlights - balance sheet CASH MOVEMENTS¹ (£m) CASH RESERVE ANALYSIS1 (£m) 31 March 2021 34.5 31 March 2021 34.5 Other cash 0.2 movements Risk buffer (20.0) Acquisition of NH (0.7) Net seeding of "Available" cash 14.5 investments (2.0) Dividends paid (8.9) Interim dividend (4.7) Cash gene
Slide 21: IPX shareholder register
IPX shareholder register IPX SHARES MARCH 2021 (m) DILUTION • Issued 2.2m shares; 2.0m to the EBT for restricted share awards or settling option exercises and 0.2m in IPX shares in issue 132.6 respect of the acquisition of the remaining Impax NH Net EBT purchased to date (4.1) CURRENT OWNERSHIP 31 M
Slide 22: Outlook
Outlook Attractive Established, Authenticity and diversified Experienced, investment strong brand distribution resilient team skills/strategies network Accelerating Potential for Supportive allocations by scaling and market asset owners developing drivers 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: Environmental Markets Strategies performance versus benchmark
Environmental Markets Strategies performance versus benchmark1,2 Leaders3 – AUM £6,607m Specialists – AUM £3,510m Water – AUM £5,407m 135.0 120.4 116.7 69.5 67.9 56.0 51.1 57.8 53.1 1 year 3 year 5 year 1 year 3 year 5 year 1 year 3 year 5 year Asian Environmental4 – Sustainable Food – AUM £1,173m C
Slide 26: Sustainable Lens Strategies performance versus benchmark
Sustainable Lens Strategies performance versus benchmark Global Opportunities1 – AUM £4,636m2,3 US Large Cap Fund – AUM US$1,211m4,5 US Small Cap Fund– AUM US$570m5,6 US Small Cap Global Opportunites US Large Cap Russell 2000 Index 113.3 133.5 77.5 94.9 67.0 S&P 500 Index MSCI ACWI 59.3 81.7 93.7 56
Slide 27: Additional information
Additional information SHARE AWARDS OUTSTANDING1 INVESTMENTS PRINCIPAL INVESTMENTS % OF NUMBER END OF EXERCISE THEME COMMENTS AWARDS VESTING DATE FUNDS/INVESTEE (£M) FUND AUM OUTSTANDING2 PERIOD Impax Asian 1.8 100% Asian Opportunities Opportunities Jan 23 – RSS 3,384,646 Global Women’s 2.1 100% Dec
Slide 28: 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’ financial metrics are shown after removing the Adjusted PBT 18.7 effects of primarily: Contingent Contingent con
Slide 29: Income Analysis
Income Analysis IFRS Adjustments for Adjusted for Six Months Ended Six Months Ended Six Months Ended 31-Mar-21 31-Mar-21 31-Mar-21 £000 £000 £000 Comment on adjustments Income statement Revenue 60,591 60,591 Operating costs (44,150) 4,301 (39,849) Amortisation of intangibles and mark to market Natio
Slide 30: Background to the Company
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Slide 31: Impax Asset Management - overview
Impax Asset Management - overview • Specialist manager, over 20 years’ experience Systematic strategies, £840m Private Markets, £348m Gender Lens, £639m • 61 investment team members Sustainability Lens, £7.0bn • Global distribution and client relations £30.0bn AUM • High-quality investment solutions
Slide 32: 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 33: 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 34: 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 35: 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 36: Private Markets: NEF III
Private Markets: NEF III Highlights 3MW + 39MW7 • €2041 million invested and committed in projects • Nine investments2 in five countries across three technologies and ownership of three development teams • Over 500MW are in operation or advanced development stages 110MW6 • Broader development pipeli
Slide 37: 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** 2021 YTD 28,6
Slide 38: 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 39: 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 40: 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 41: Climate: annual disclosure presentation – USD
Climate: annual disclosure presentation – USD 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 33,017.69 2,708.43 1
Slide 42: 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 Asset Weighted 3yr Annualized Std Annualized Std Annualized Std Year (Millions) (Millions) Portfolios Gross Return Annual Net Return MSCI AC AP Return FTSE EO A
Slide 43: 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 44: 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** 2021 YTD 28,683.7
Slide 45: Impax Large Cap Strategy
Impax Large Cap Strategy ANNUAL PERFORMANCE TOTAL FIRM TOTAL RETURN TOTAL RETURN ASSETS (USD) COMPOSITE ASSETS S&P 500 INDEX ASSET WEIGHTED COMPOSITE 3 YEAR BENCHMARK 3 NUMBER OF YEAR (MILLIONS)* (USD)(MILLIONS) GROSS OF FEES (%) NET OF FEES (%) (%) STD DEV** STD. DEV.*** YEAR STD. DEV. ACCOUNTS 201
Slide 46: Impax Core Bond Strategy disclosures
Impax Core Bond Strategy disclosures ANNUAL PERFORMANCE ASSET COMPOSITE TOTAL FIRM ASSETS COMPOSITE ASSETS TOTAL RETURN TOTAL RETURN BLOOMBERG BARCLAYS WEIGHTED 3 YEAR BENCHMARK NUMBER OF YEAR (USD) (MILLIONS)* (USD)(MILLIONS) GROSS OF FEES (%) NET OF FEES (%) US AGGREGATE STD DEV.** STD DEV.*** 3 Y
Slide 47: Impax High Yield Bond Strategy disclosures
Impax High Yield Bond Strategy disclosures ANNUAL PERFORMANCE ASSET BENCHMARK 3 ICE BOFA MERRILL LYNCH TOTAL FIRM ASSETS COMPOSITE ASSETS TOTAL RETURN TOTAL RETURN WEIGHTED STD COMPOSITE 3 YEAR STD. NUMBER OF U.S. HIGH YIELD BB-B INDEX YEAR (USD) (MILLIONS)* (USD) (MILLIONS) GROSS OF FEES (%) NET OF
Slide 48: Important information
Important information Disclaimer 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 Mana
Impax Asset Management Group — H1 2021 Earnings Presentation on 6ix