Another leap in AUM, outlook remains positive

AUM reached £30.0bn for the first time on 31 Mar 21 (six months into FY21), up 49% in H1 and 19% in Q2. Net inflows were particularly impressive for the quarter at £4.0bn (average quarterly inflows in FY20 were £0.9bn). This was on top of a solid market movement contribution to AUM (£0.8bn or 3.4% of opening AUM).

We see no let up in capital flows towards sustainable investing and maintain a positive outlook for Impax. Moreover, we think the trend can get even stronger, particularly as COP26 approaches (the United Nations Climate Change Conference to be held in Glasgow in Nov ‘21). Pressure to accelerate climate change reduction initiatives is already building in advance of the conference.

Impax is now ahead of the AUM growth trajectory (£50-55bn by 2025) that underpins our fundamental valuation of 925p per share – which is 5% above the 880p closing price on 9 April 21. Our AUM forecasts for FY21 are currently looking conservative (although we point out out that market moves can impact top line AUM to the downside too) and we will be updating our forecasts when interim results are released in June.