Impax recorded a solid Q1 of FY24, with AUM growing by £1.7bn (+4.6%) to £39.1bn on 31 Dec 23 (30 Sep 23: £37.4bn). This is above the trajectory required to meet our FY24 AUM forecast of £41.1bn (+10% annual AUM growth), but as it is very early in the financial year and markets remain volatile, we have taken a conservative approach and not yet adjusted our forecasts.
It has also announced an acquisition in the fixed income segment. While not huge in the context of the group (£351m or just under 1% of group AUM), fixed income is seen as strategically important and a significant growth opportunity, particularly in the US. Impax Asset Management Ireland Limited has entered into an agreement (subject to closing conditions) to acquire the assets of Absalon Corporate Credit, a fixed income manager of two strategies.
We remain bullish about the prospects of the sustainable investing market generally, and of Impax specifically. The positive AUM update for Q1-24 and the Absalon acquisition reinforce this view and our fundamental valuation remains at 800p per share, 50% above the current share price.
