Impax Asset Management Group Plc · LSE:IPX
Impax Asset Management — FY2023 Earnings Presentation
63 slides from Impax Asset Management's earnings presentation, Nov 29, 2023
Slide 1: Results for the year ending 30 September 2023
FOR INFORMATION ONLY. THIS IS NOT A MARKETING COMMUNICATION. NOT FOR FURTHER DISTRIBUTION Results for the year ending 30 September 2023 29 November 2023
Slide 2: Agenda
Agenda • Highlights and business update Ian Simm Karen Cockburn Founder & Chief Executive Chief Financial Officer • Financial update • Outlook • Appendices 2
Slide 3: FY 2023 highlights
FY 2023 highlights AUM up 4.8% Creditable Progressed driven by strong performance, product client retention and despite challenging development investment returns macroeconomic in listed equities conditions Reuters “Responsible Investor of the Year” Building out Strengthened Increased Environmental
Slide 4: FY 2023: Breakdown of AUM increase (£bn)
FY 2023: Breakdown of AUM increase (£bn) 30-Sep-23 37.4 Outflows (4.2) Inflows 3.0 Market movement (1.5) 31-Mar-23 40.1 Outflows (3.4) Inflows 4.5 Market movement 3.3 30-Sep-22 35.7 As at 30 September 2023, assets under advice represent ~3% of total AUM. 4
Slide 5: Robust financial performance
Robust financial performance1 Past performance does not predict future returns. Financial highlights - KPIs Assets under management (£bn)² 178.4 Revenues (£m) 175.4 2023 37.4 143.1 2022 35.7 Adjusted 58.1 operating 67.4 2021 37.2 profit (£m) 3 55.80 Adjusted 60.0 profit before 68.4 Shareholders’ equ
Slide 6: Supportive policy drivers amid challenging investment conditions
Supportive policy drivers amid challenging investment conditions • A headline rally in global equities markets… ― Technology stocks (“Magnificent Seven”) buoyed by public release of ChatGPT • …masked a more fragile sentiment in many areas of the global economy ― Investors delaying decision-making gi
Slide 7: Compelling opportunities in the transition to a more sustainable economy
25 years on, Impax continues to be well positioned Compelling brand & investment Diversified, philosophy expanding product suite Compelling opportunities Global base of in the transition to a more institutional and sustainable economy intermediary Resilient, clients scalable platform 7
Slide 8: Well-diversified AUM and revenue
Well-diversified AUM and revenue AUM by range AUM by strategy1 International Sustainable Economy, 2% Other, 8% 59% FY 2023 Global Women's Leadership, 2% Environmental Markets Leaders, 18% 64% FY 2022 Core Bond, 2% US Large Cap, 5% 35% FY 2023 Sustainability Lens Sustainability Lens 30% FY 2022 Water
Slide 9: Resilient relationships, landmark mandates and a strong pipeline
Resilient relationships, landmark mandates and a strong pipeline • Modest net outflows of £92 million demonstrates benefits of diversification by client, geography & product • Client retention is high, despite challenging markets • First client survey: 90% report a positive view of Impax • Secured s
Slide 10: Movement in net inflows – breakdown by channel (£m)
Movement in net inflows – breakdown by channel (£m) Funds sub-managed for UK/Ireland BNP Paribas Asset Management North America 741 St James's Place (360) 1,123 (1037) Own-label funds1 683 BNPP funds (518) (57) (40) IEM plc Other mutual & advisory funds 50 319 Other EMEA distributors/funds (109) (12
Slide 11: Expansion of both direct distribution and our partnership network
Expansion of both direct distribution and our partnership network Direct Canada: Nordics: Japan: appointed first client- dedicated business opened new office introducing representative development professional in Tokyo Partners US: Latin America: Australia: Impax funds now on many UCITS funds distri
Slide 12: Product development: listed equities and private markets
Product development: listed equities and private markets • New strategy launches ― Sustainable Infrastructure (Active) – Oct 2022 ― Global Social Leaders – late 2023 ― Global Emerging Markets – planned H1 2024 • Expanding existing strategies ― Europe & Asia-Pacific ― UCITS fund launch of US Environm
Slide 13: Product development: fixed income
Product development: fixed income • Higher interest rate environment attractive • Significant market opportunity to offer sustainability-integrated products • Impax well-positioned given our heritage • Scope to build additional product to complement US Core Bond and US High Yield strategies • Expand
Slide 14: Strong fundamentals, but mixed short-term investment performance
Strong fundamentals, but mixed short-term investment performance Past performance does not predict future returns. Specialists strategy Fundamentals (“NTM”)1, 2 • Cyclical derating of Impax’s major investment portfolios 18.0x Specialists Strategy MSCI ACWI 15.3x • Many of our strategies saw positive
Slide 15: Introducing: The Impax Sustainability Centre
Introducing: “The Impax Sustainability Centre” 1 2 • Draws on our deep heritage in this space Investment Sustainability Advocacy & outreach & Stewardship • Brings together Sustainability 20+ years’ experience of & Stewardship and Policy & sustainable taxonomies Advocacy teams Ranked 1 for proxy voti
Slide 16: Efficiency, risk and governance: increasing our resilience
Efficiency, risk and governance: increasing our resilience Technology and Risk Governance efficiency Undertook efficiency Appointed new Chief Undertook a review review Risk Officer of Group’s governance model Developed our tech Expanded Enterprise Introduced more structure platform: Risk team around
Slide 17: Equipping our people for success
Equipping our people for success Number of employees1 • Sharply reduced headcount expansion, up 10% (2022: 26% ) 166 155 • Strong employee engagement score of 90%, 97% Sep-23 Sep-22 aligned to Impax’s mission, culture and values 115 102 • Rolled out new remuneration framework, with Total: scorecard
Slide 18: Board succession
Board succession • Sally Bridgeland and Lindsey Brace Martinez to step down from the Board, July 2024 • Simon O’Regan to become Chair in July 20241 • Annette Wilson to become Senior Independent Director in July 20241 • Julia Bond joined as Non-Executive Director on 29 November 2023 • Karen Cockburn
Slide 19: Financial update
Financial update
Slide 20: Robust revenue performance
Robust revenue performance Revenue (£m) Average fee margin (bps) 46.3 47.1 45.2 2023 178.4 Performance (2.7) Net flows 5.7 2022 175.4 2021 143.1 2023 2022 2021 Sep-23 Sep-23 annualised run rate: run rate: 45.1 bps £168.8m 20
Slide 21: Continued revenue diversification
Continued revenue diversification Revenue by strategy1 Revenue by region Asia Pacific, 3% Outer circle: 2023 Middle circle: 2022 Inner circle: 2021 Others, 13% 2% International Sustainable Economy, EMEA2, 46% North 2% 1% Leaders, 21% 35% America, 34% 46% Global Women's Leadership, 35% 2% 46% Core Bo
Slide 22: Operating expenses: cost growth moderates
Operating expenses: cost growth moderates Adjusted operating expenses (£m) Total staff (average)1 Period Ave: End: 2023 120.3 2023 83 207 290 300 Variable staff costs (5.3) 2022 71 169 240 272 Fixed Staff costs 9.6 Non-staff costs 8.0 2021 62 133 195 216 2022 108.0 Investment Staff Other Staff Varia
Slide 23: Resilient operating performance
Resilient operating performance Operating profit1 (£m) Operating margin 2023 58.1 2023 32.6% 2022 67.4 2022 38.4% 2021 55.8 2021 39.0% Operational gearing trend (£m) 200 45% 180 40% 160 35% 140 30% 120 25% 100 20% 80 60 15% 40 10% 20 5% 0 0% 2017 2018 2019 2020 2021 2022 2023 Revenue Operating profi
Slide 24: Continued cash generation supporting stable dividend payout
Continued cash generation supporting stable dividend payout Cash movements¹ (£m) Dividend (p) 2023 87.7 2023 4.7 22.9 27.6 Other cash 0.8 27.6 movements 2022 4.7 22.9 Net seeding of (5.3) investments 2021 3.6 17.0 20.6 Acquisition of own (15.1) shares 2020 1.8 6.8 8.6 Dividends paid (36.4) Cash incr
Slide 25: Healthy balance sheet maintained
Healthy balance sheet maintained Shareholder equity (£m) Capital update 138.2 • Strong Balance sheet maintained 134.0 • No debt 50.7 48.0 • Over £50m capital surplus (including seed Capital surplus capital of £13m) & seed • c. £5m (85%) increase in seed capital Proposed 30.2 deployed dividend 30.0 C
Slide 26: Outlook
Outlook
Slide 27: Compelling opportunities in the transition to a more sustainable economy
25 years on, Impax continues to be well positioned Compelling brand & investment Diversified, philosophy expanding product suite Compelling opportunities Global base of in the transition to a more institutional and sustainable economy intermediary Resilient, clients scalable platform 27
Slide 28: Appendices
Appendices
Slide 29: 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 60.0 Adjusted PBT effects of primarily: Foreign Exchange 4.0 • Fo
Slide 30: Additional information
Additional information Share awards outstanding1 Awards Number outstanding Vesting date End of exercise period RSS 2,695,682 2024-2028 LTOP 1,979,325 2024-2028 2028-2033 Total 4,675,007 Investments Theme Principal funds/investee Investments (£m) % of fund aum Comments Asian Opportunities Impax Asian
Slide 31: IPX shareholder register
IPX shareholder register IPX shares September 2023 (m) Share management • EBT purchased 2,074,454 shares in the period • Average weighted price paid £7.26 IPX shares in issue 132.6 • Continuation of EBT purchasing policy Shares held in EBT (4.3) Current ownership 30 September 2023 Net IPX shares 128
Slide 32: Background to the Company
Background to the Company
Slide 33: Impax's investment philosophy
Impax’s investment philosophy The transition to a more sustainable economy Secular Sectoral Attractive for “active” drivers transformation investment managers • Resource/environmental • Large-scale, affecting constraints most sectors • Regulation • High growth rates • Technology change • Uncertain i
Slide 34: Strong track record of growth – assets under management (£m)
Strong track record of growth – assets under management (£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 20,183 2021 37,21
Slide 35: Global distribution
Global distribution North America Desjardins AM (Canada) FÉRIQUE (Canada) Mackenzie Investments (Canada) NEI Investments (Canada) Impax commingled vehicles Impax Funds vehicles1 Latin America BTG Pactual Europe ABN AMRO ASN Bank BNP Paribas Asset Management Formuepleje St. James’s Place Lombard Odie
Slide 36: 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 Equities Active Equities Systematic Equities Systematic Equities Private Markets 1971 Specialists Global Opportunities
Slide 37: Sustainability Lens strategies: performance versus benchmark (cumulative, %)
Sustainability Lens strategies: performance versus benchmark (cumulative, %)1 Past performance does not predict future returns. Global Opportunities – AUM £9.2bn US Large Cap – AUM £1.9bn US Small Cap – AUM £0.5bn Global Opportunities US Large Cap US Small Cap MSCI ACWI2 S&P 500 Index3 Russell 2000
Slide 38: Environmental Markets strategies: performance versus benchmark (cumulative, %)
Environmental Markets strategies: performance versus benchmark (cumulative, %)1 Past performance does not predict future returns. Leaders3 – AUM £6.7bn Specialists – AUM £3.1bn Water – AUM £6.1bn Leaders Specialists Water MSCI ACWI2 MSCI ACWI2 MSCI ACWI2 65.2 49.8 50.3 46.1 46.1 46.1 35.5 29.4 29.4
Slide 39: Additional information
Additional information
Slide 40: Leaders: GIPs report – USD
Leaders: GIPs report – USD Past performance does not predict future returns. MSCI AC MSCI AC FTSE EOAS Composite Description Total firm Composite Annual Annual World Asset 3yr World 3yr 3yr The Leaders Composite contains long only accounts, which assets assets Number of gross net annual FTSE EOAS we
Slide 41: Leaders: GIPs report – USD continued
Leaders: GIPs report – USD continued Firm Information Impax Asset Management is defined as Impax Asset Management Ltd, Impax Asset Management (AIFM) Ltd., Impax Asset Management Ireland Ltd, Impax Asset Management LLC, and Impax Asset Management (Hong Kong) Limited (together, “Impax”). These entitie
Slide 42: Climate: GIPs report – USD
Climate: GIPs report– USD Past performance does not predict future returns. Total firm Composite Annual Benchmark 3yr assets assets Number of Annual gross Annual net benchmark Asset weighted 3yr annualized annualized std Year (millions) (millions) portfolios return return return stddev1 std dev2 dev
Slide 43: Water: GIPs report – USD
Water: GIPs report – USD Past performance does not predict future returns. Composite Description FTSE EO The Water Composite contains long only accounts, which invest MSCI AC Water MSCI AC FTSE EO Water globally in companies active in the rapidly growing water value Total firm Composite Annual Annua
Slide 44: Water: GIPs report – USD (continued)
Water: GIPs report– USD (continued) Firm Information Impax Asset Management is defined as Impax Asset Management Ltd, Impax Asset Management (AIFM) Ltd., Impax Asset Management Ireland Ltd, Impax Asset Management LLC, and Impax Asset Management (Hong Kong) Limited (together, “Impax”). These entities
Slide 45: Asian Environmental: GIPs report – USD
Asian Environmental: GIPs report – USD Past performance does not predict future returns. MSCI AC FTSE EO Composite Description The Asian Environmental Composite contains long only accounts, Total firm Composite Annual Annual Asset 3yr AP 3yr AP 3yr which invest regionally in Asia-Pacific companies t
Slide 46: Asian Environmental: GIPs report – USD (continued)
Asian Environmental: GIPs report – USD (continued) Firm Information Impax Asset Management is defined as Impax Asset Management Ltd, Impax Asset Management (AIFM) Ltd., Impax Asset Management Ireland Ltd, Impax Asset Management LLC, and Impax Asset Management (Hong Kong) Limited (together, “Impax”).
Slide 47: Global Opportunities: GIPs report – USD
Global Opportunities: GIPs report – USD Past performance does not predict future returns. Benchmark Composite Description Total Firm Composite Number Annual Annual Annual Asset 3yr 3yr The Global Opportunities Composite contains long only accounts, which invest in high quality companies in order Ass
Slide 48: Global Opportunities: GIPs report – USD (continued)
Global Opportunities: GIPs report – USD (continued) Firm Information the reinvestment of dividends, capital gains, and other From January 2002 to October 2018 the gross returns for the Impax Asset Management is defined as Impax Asset earnings when appropriate. Gross of fees returns are separate acco
Slide 49: Sustainable Food: GIPs report – USD
Sustainable Food: GIPs report – USD Past performance does not predict future returns. Benchmark Composite Description Total firm Composite Annual Annual Annual Asset 3yr 3yr The Sustainable Food Composite contains long only accounts, which assets assets Number of gross net benchmark weighted annuali
Slide 50: Sustainable Food: GIPs report – USD (continued)
Sustainable Food: GIPs report– USD (continued) Firm Information Impax Asset Management is defined as Impax Asset Management Ltd, Impax Asset Management (AIFM) Ltd., Impax Asset Management Ireland Ltd, Impax Asset Management LLC, and Impax Asset Management (Hong Kong) Limited (together, “Impax”). The
Slide 51: Specialists: GIPs report – USD
Specialists : GIPs report – USD Past performance does not predict future returns. MSCI AC FTSE Composite Description Total firm Composite Annual Annual Asset 3yr World 3yr ET 3yr The Specialists Composite contains long only accounts, which assets assets Number of gross net MSCI AC FTSE ET weighted a
Slide 52: Specialists: GIPs report – USD (continued)
Specialists: GIPs report – USD (continued) Firm Information displayed in USD. Components that constitute Custom FTSE ET Index are incurred by portfolios may vary. Impax Asset Management is defined as Impax Asset Management Ltd, available for prior periods upon request. From January 2002 to October 2
Slide 53: US Large Cap: GIPs report – USD
US Large Cap: GIPs report – USD Past performance does not predict future returns. Composite Description S&P 500 The US Large Cap Strategy is a core equities strategy that fully Total Firm Composite Annual S&P 500 Asset 3yr 3yr integrates analysis of sustainability risks and opportunities and Assets
Slide 54: US Large Cap: GIPs report – USD
US Large Cap: GIPs report – USD Firm Information Impax Asset Management is defined as Impax Asset Management Ltd, Impax Asset Management (AIFM) Ltd., Impax Asset Management Ireland Ltd, Impax Asset Management LLC, and Impax Asset Management (Hong Kong) Limited (together, “Impax”). These entities are
Slide 55: US Small Cap: GIPs report – USD
US Small Cap: GIPs report – USD Past performance does not predict future returns. Composite Description Russell Russell The US Small Cap Strategy a core equities strategy that Total firm Composite Annual Asset 3yr Number of Annual net 2000 2000 3yr Year assets assets gross weighted annualized fully
Slide 56: US Small Cap: GIPs report – USD (Continued)
US Small Cap: GIPs report – USD (Continued) Firm Information Impax Asset Management is defined as Impax Asset Management Ltd, Impax Asset Management (AIFM) Ltd., Impax Asset Management Ireland Ltd, Impax Asset Management LLC, and Impax Asset Management (Hong Kong) Limited (together, “Impax”). These
Slide 57: Core Bond: GIPs report – USD
Core Bond: GIPs report – USD Past performance does not predict future returns. Composite Description The Core Bond Strategy seeks competitive risk-adjusted returns while Bloomberg Bloomberg offering broad fixed income diversification and positive environmental Barclays US Barclays US and social impa
Slide 58: Core Bond: GIPs report – USD (continued)
Core Bond: GIPs report – USD (continued) Firm Information Impax Asset Management is defined as Impax Asset Management Ltd, Impax Asset Management (AIFM) Ltd., Impax Asset Management Ireland Ltd, Impax Asset Management LLC, and Impax Asset Management (Hong Kong) Limited (together, “Impax”). These ent
Slide 59: High Yield Bond: GIPS report – USD
High Yield Bond: GIPS report – USD Past performance does not predict future returns. Composite Description ICE BOFA US The High Yield Bond Strategy seeks to deliver high current income and cash pay strong risk-adjusted total returns through a process that employs rigorous credit analysis and a keen
Slide 60: High Yield Bond: GIPS report – USD (Continued)
High Yield Bond: GIPS report – USD (Continued) Firm Information Impax Asset Management is defined as Impax Asset Management Ltd, Impax Asset Management (AIFM) Ltd., Impax Asset Management Ireland Ltd, Impax Asset Management LLC, and Impax Asset Management (Hong Kong) Limited (together, “Impax”). The
Slide 61: NEF Performance notes
NEF Performance notes All calculations, valuations and investment performance figures within this document have contain errors, or that alternative assumptions would not be more appropriate or produce been calculated using the methodologies set out below. Past performance does not predict significan
Slide 62: NEF Performance notes, continued
NEF Performance notes, continued Important Notes Concerning Targeted and Estimated Returns and Prior Performance. All performance data regarding transactions owned by prior Impax investment vehicles contained herein is provided for informational purposes only. There can be no assurance that Impax ma
Slide 63: Important information
Important information NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION The information contained in this confidential document (the “Presentation”) a
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