Impax Asset Management - Investor Presentation (FY Results) - December 2025

Brief Summary:
This in-depth investor presentation led by Impax Asset Management's CEO Ian Simm and CFO Karen Cockburn reviews the firm's financial year ending September 2025. Despite a tough market dominated by mega-cap AI stocks and negative outflows, Impax reports increased stability in the second half, successful cost reductions, business scaling, and a positive long-term outlook, especially in sustainable investing themes. The leadership also addresses strategic priorities, an updated dividend policy, and answers to shareholders' questions.

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1. Introduction to Impax

The presentation opens on a welcoming note, jumping straight into the agenda. Ian Simm sets the tone:

"Without further ado, just straight into the agenda. So, three things to cover: a quick summary, financials with Karen, and then a brief outlook."

He explains why Impax Asset Management exists, emphasizing its view that

"there's an enormous investment opportunity worldwide over the next 5 to 15 years in the transition to a more sustainable economy, driven by mainstream capitalist demand for more efficient, less polluting goods and services."

This "transition" covers booming areas such as:

• Clean energy 🌞
• Infrastructure 🏗️
• Smart materials
• Food and agriculture 🌱

Importantly, Impax differentiates itself:

"This is not about ethical investing. It's about thematic or sector specific opportunities."

Since founding the company in 1998, Simm says, Impax has grown into a global player with clients all over the world. Over the last five years, competition increased as many big asset managers entered the climate change space. But now,

"Many of those players have recently retreated in the wake of some challenges, particularly from US regulators around their response to fiduciary duty. Many of them have confused themselves and the market as to whether they're trying to make money or save the world. Whereas Impax has very clearly been aiming to make money—but in areas where there is a tangible non-financial benefit."

He sums up Impax's current position as

"Global player with weakening competition, and crucially, our business strategy is focused on scaling."

Impax offers three scalable pillars: Listed Equities, Fixed Income, and Private Equity, with a strong focus on growing each.

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2. Business Highlights

Ian Simm addresses the recent financial year's challenges right away:

"It has been a particularly challenging market for investors this year... dominated at times by the so-called Magnificent 7 stocks or AI-related mega cap names."

Key points in Impax's business performance:

• After rapid growth from 2019 to 2022, flows turned negative, although net outflows improved significantly in the second half of the year.
• Equity strategy valuations are now described as "compelling"—a strong buying opportunity.
• Impax made "significant progress," highlighted by acquiring Sky Harbor, a high-yield fixed income specialist.
• The firm reduced its cost base for efficiency, while maintaining financial strength. Simm announces:

"We're nearly completed with a £10 million share buyback program."

The market backdrop challenged investor confidence, especially in the US due to tariffs, geopolitics, and inflation concerns. Institutional investors grew cautious, while retail investors continued investing.

On strategy, Simm points to:

• A narrow market dominated by AI/metaverse stocks
• Growing interest in systematic, non-actively managed strategies, where Impax has an established presence
• Fixed income remaining robust, though returns are limited by tight spreads (risk premiums)
• Private markets still holding value, particularly for smaller deals

Simm summarizes:

"Impax is playing in the small to midsize area where there's still plenty of value to be harnessed."

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3. Financial Performance Update

Karen Cockburn takes the floor with financials, candidly noting:

"We find ourselves at the bottom of the cycle. Numbers still show a healthy profit, but do reflect the level of outflow that we have seen this year."

Main financial highlights:

• Adjusted operating profit: £33.6 million
• Earnings per share (EPS): 21.3p
• Both figures are roughly a third down from the prior year, mostly due to outflows and the loss of the St. James's Place mandate.
• Cost cuts saved £9 million in the year, largely from a 15% headcount reduction.

A key message for investors:

"Despite outflows, the fee margin, a key measure for the business's health, actually improved."

Other details:

• Operating margin: Finished at 23.7%
• Balance sheet health: Strong, with £64.7 million in cash and no debt
• 12p per share proposed dividend (55.7% payout), with a 6.9% yield.
• Ongoing "first-ever" share buyback program nearly complete, expected to cancel up to 4% of share capital.

Karen also stresses:

"We have been able to respond to a significant amount of AUM and flow loss... with a refined cost base."

And on strategic investment:

"Whilst removing costs, we will continue to invest in the areas where we see the opportunity for growth."

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4. Strategic Priorities and Initiatives

Ian Simm details Impax's six key strategic priorities under two main themes:

Growth Platforms

1. Scaling Equities: Continued technology and AI experiments, new research structures, launching the first ETF in the US, expanding systematic equities, and launching an emerging markets fund.
2. Scaling Fixed Income: Building on acquisitions (Sky Harbor and Absilon), expanding the team to critical mass, spreading the client base across Europe and the US.
3. Growing Private Equity: Continuing to back small renewable energy developers across Europe, exiting and deploying new funds.

Enabling Capabilities

• Expanding Distribution: Growing direct sales in Europe (DACH, Scandinavia, Benelux, France), and further mandates in Benelux and Asia-Pacific.
• Deepening Partnerships: Reducing outflows from major clients (BNP Paribas), seeking new distribution in Asia-Pacific, Latin America, Southern Europe.
• Optimizing Operations: Efficiency drives have reduced headcount without sacrificing growth potential, with more technology adoption on the horizon.

The Sustainability Center stands out as a unique client service resource, offering:

• Enhanced research and engagement
• Reporting on non-financial outcomes
• Thought leadership, including work around physical climate risk
• Collaboration with policymakers

"We are enhancing our research, coordinating engagement, providing detailed non-financial reports, and providing thought leadership information, for example around physical climate risk."

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5. Outlook and Summary

Ian Simm's outlook is optimistic:

"The investment management market is at an interesting juncture. Major asset owners are increasingly looking for specialist investment management service in differentiated areas—where Impax stands out."

After 25+ years dedicated to sustainable opportunities, Impax's brand resonates globally, especially with asset owners and large institutions. However, the equity market still dominates revenues, leaving some exposure to cycles.

Simm looks ahead:

"We are overdue a return to being in favor, and I think the catalysts for that return are starting to appear. It's a little too early to announce that we're definitely out of the woods, but hopefully that will materialize in the new year."

He predicts:

• The current dominance of AI mega-cap stocks will fade, leading to broader market leadership in 2026
• Diversification will continue through fixed income and private markets—no immediate new acquisitions, but the firm is well capitalized for organic and inorganic growth

"Our investment performance should be bouncing back fairly promptly, and when it does, then the flows can pick up very quickly."

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6. Questions & Answers

In Q&A, Simm and Cockburn address numerous investor concerns:

On client stickiness:

"There are two types of client: long-term clients who've been with us for five to 25 years, and more recently arrived ones. The long-term ones generally are still with us at scale."

On diversification targets:

"The board has no formal target for splitting equities, fixed income, and private markets, but we'd look at other similar firms with equally sized divisions—though private markets are harder to scale."

On private equity style:

"We describe what we do as value-add infrastructure—backing developers of new assets, funding construction, and then selling. It's not traditional venture capital or pure private equity."

On systematic equities:

"It's using computer-powered selection within our defined taxonomies, with less human intervention, lower fees, and the ability to scale significantly."

On North America:

"North America provides about £10B AUM, with Canada around 15-20%. The US offers scale, but Canada is very pro-sustainability. Both have strong potential."

On BNP Paribas channel:

"The recent stabilization reflects their improved view on equities and a much bigger sales platform after acquiring AXA's investment arm."

On competitors:

"There's a smaller group of focused, global peers left. Many big names have pulled back. Frankly, no one is as large or diversified as Impax in this area."

Simm concludes with a confident summary:

"Investment has to be a medium-term game. Impax is fantastically positioned for medium-term success given our global, leading brand in an area set for further expansion. The market is overdue a return to a broader structure with less dominance by a handful of names. Our investment performance should be bouncing back fairly promptly."

Karen adds:

"We have a very strong culture, management is nicely aligned with external investors, and we really value our client connections."

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Conclusion

Despite strong market headwinds and a challenging period for sustainable investing, Impax Asset Management ends 2025 in a stable, optimistic position—leaner, more focused, and prepared for future growth. With a differentiated, global brand and a strategic approach to scaling in equities, fixed income, and private equity, Impax is confident that its investment performance will rebound as market cycles normalize. As Simm puts it:

"We are really well positioned to capitalize on the transition to a more sustainable economy. The future looks promising."

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"Thank you for joining. We're always available for one-on-one questions and look forward to staying in touch."