AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights:
- Impax Asset Management loses £5.2 billion St James’s Place mandate.
- Annualised revenue impact estimated at £12.7 million.
- SJP cites diversification of investment styles as reason for termination.
Impax Asset Management (LSE:IPX) experienced a sharp drop in share value, tumbling over 20% after announcing the termination of its mandate to manage a £5.2 billion Sustainable & Responsible Equity Fund for St James’s Place PLC (LSE:STJ).
St James’s Place, a leading wealth manager, issued notice on the mandate, with the termination set to take effect in February 2025, pending approval from unit holders at a meeting scheduled for 9 January. The fund, a cornerstone of Impax’s managed portfolio, was the only mandate the firm managed for SJP.
Rationale for Termination
SJP cited a strategic decision to “further diversify the fund across investment styles” as the rationale for its termination notice. This move aligns with broader efforts by the wealth manager to enhance portfolio diversification and cater to varying investor preferences.
Impax acknowledged the decision, stating that it would result in an estimated £12.7 million annualised revenue impact. Despite this setback, the firm emphasized its commitment to sustainable investment strategies and its broader portfolio of environmental, social, and governance (ESG)-focused funds.
Financial and Market Impact
The news triggered a significant market reaction, with Impax’s shares plummeting by 21.5% to 257p in early trading. The loss of the SJP mandate represents a substantial challenge for the ESG-focused fund manager, given the size of the portfolio and its contribution to overall revenue.
St James’s Place, one of the UK’s largest wealth managers, is known for its commitment to offering clients diverse and adaptable investment options. The move to reassign the Sustainable & Responsible Equity Fund underscores its strategy to adapt to evolving market dynamics and investment styles.
Broader Implications for Impax
For Impax, the loss of the mandate underscores the competitive nature of the asset management sector and the challenges associated with retaining large institutional clients. While the firm has built a strong reputation in sustainable investment, the mandate loss highlights the need for adaptability in a rapidly changing market.
Impax remains focused on its long-term growth strategy, leveraging its expertise in ESG and sustainable investments. The firm is expected to explore new opportunities to compensate for the revenue loss and further solidify its position as a leader in sustainable asset management.
Looking Ahead
As the wealth management landscape evolves, Impax’s ability to navigate challenges and capitalize on opportunities in the ESG space will be critical. While the loss of the SJP mandate marks a notable setback, the firm's commitment to sustainable investment and innovation positions it to recover and pursue future growth avenues.
