Positive net inflows despite market declines
AUM closed FY22 (30 Sep) on £35.7bn, 3.3% up over Q4 (30 Jun 22: £34.5bn) and 4.1% down y-o-y (30 Sep 21: £37.2bn). The sharp market falls over 2022, particularly in growth-oriented sustainability stocks, will understandably dominate any review of the year. Indeed, the FTSE Environmental Opportunities All-Share Index fell 28.1% over Jan-Sep 22, which contributed to a -£4.4bn AUM impact from market movements and investment performance over FY22.At a company-fundamental level, what characterises FY22 is how well Impax’s ability to attract and retain client assets has held up, despite unhelpful market conditions. Net inflows totalled +£2.9bn in FY22 (+£606m in Q4), with only one quarter of relatively minor net outflows during FY22 (Apr-Jun, a period of the sharpest market falls, when net outflows were £186m).
However, our fundamental valuation per shares adjusts to 960p per share from 1050p, purely because of the jump in the 10-year Gilt yield (the risk-free rate used in our DCF valuation) which is now 4.2% (2.1% at the time of our previous forecast in July). Additionally, given its strong growth prospects, Impax’s PER of 14.3, only just above a peer group median of 13.0, is in our view, too low.
Impax Asset Management Group is an investment firm, providing listed and private equity strategies primarily to institutional clients. As of Sep 30 2017, Co. has total assets under management and advice of £7.30 billion.
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