The IFSL Impax environmental leaders fund aims to provide growth and income by focusing on three environmental sub-sectors – alternative energy and energy efficiency, water treatment and pollution control and waste technologies/resource management. It will look for quoted firms with a market capitalisation of at least $500m that are establishing environmental divisions to position themselves as major players in the sector and that are improving returns as a result of shifting into environmental markets.
The fund will typically invest in companies that derive at least 20 per cent of their revenues or profits from the environmental sector, or firms that have at least 20 per cent of their capital invested in the sector. However, many of the companies in the portfolio will have a bigger proportion of their revenue derived from the environmental sector.
It will be managed by the Impax team, which has a 10-year track record in managing environmental funds. The team includes chief executive Ian Simm and fund managers Bruce Jenkyn-Jones and Simon Gottelier. Simm joined the Impax Group in 1996 and established the asset management division in 1998.
Jenkyn-Jones joined in 1999, working initially on venture capital investments before developing the listed equity business. He co-manages Impax environmental markets, Impax environmental markets ( Ireland ) ASN Milieu & Waterfonds and Parworld environmental opportunities.
Gottelie joined Impax from Veolia Envirnonment – formerly Vivdendi – where he was a Business Analyst in the finance department.
According to Impax, environmental markets are expected to develop dramatically as the world adjusts to rising demand, scarce resources and climate change. It believes that many companies are well placed to benefit from growth driven by new and tighter environmental regulation from governments and the development of lower cost, clean technologies.
Some investors may like a this fund as the manager is a specialist in the sector and the focus on big and medium sized companies should be less risky than a portfolio which invests in smaller companies. However. some of the companies at the forefront of tackling environmental problems are small, so this fund would miss out on this growth potential.