The end of the Magnificent Seven's reign may be a boon for this investing strategy
on Livewire| Original source: https://www.livewiremarkets.com/wires/the-end-of-the-magnificent-seven-s-reign-may-be-a-boon-for-this-investing-strategy
Sustainability investing is not new or novel. The first sustainable mutual fund was launched by two Methodist ministers in 1971 and remains investable. Today, sustainable investing strategies across equities, bonds, and private markets, are now a core part of many multi-faceted investment managers. Having said this, few firms have worked solely in this space over multiple decades and investment cycles. One of those firms is Impax Asset Management.
Impax, a specialist asset manager aimed at finding investment opportunities in the global transition to a more sustainable economy, was set up in 1998. Its founder, Ian Simm, is still the CEO after 26 years. Its number two employee, Bruce Jenkyn-Jones, is the Co-Chief Investment Officer and was alone in that role for almost all of the firm's existence.
One other long-time employee is David Winborne. Winborne joined in September 2015 to establish the Impax Leaders Fund. Winborne now manages Impax's Global Opportunities and US Environmental Leaders strategies as well.
Winborne believes that the thing separating Impax from its rivals is not just its heritage but also its comprehensive framework for picking the best companies in the most profitable sub-sectors of the global energy transition theme.
"We realised that a [traditional] revenue stream wasn't really feasible because there are 7,500 companies out there with a market cap of at least $1 billion. Instead, what we did was to develop a proprietary tool ... which ... aims to identify attractive sub-sectors within the market which we focus our investing energy on," Winborne said.
"It won't give you all the answers but hopefully, it will give you attractive pools in which to fish," he added.
In this Fund in Focus, presented by Livewire's Eddie Orchard, Winborne argues why now is the right time to be allocating capital toward this classic (but controversial) investment theme, the key risks prospective investors should consider, and how their investors use Impax's funds in their investment strategy. The answer may surprise you!
Plus, Winborne shares an investment that he thinks is emblematic of the economic transition opportunity as well as some details on a recent sale the fund made.
Timecodes
- 0:00 - Intro
- 0:25 - Why is now the time to allocate capital toward sustainable investing?
- 1:09 - What makes Impax's approach different to its rivals?
- 2:19 - Tell us a little bit about the team managing Impax's funds.
- 4:00 - What are some of the risks prospective investors should consider?
- 5:32 - How do you narrow down your opportunity set?
- 7:20 - Tell us about a company that symbolises this opportunity.
- Stocks mentioned: Ashtead Group (LON: AHT)
- 10:00 - Tell us about a company you sold out of recently and why you did.
- Stocks mentioned: MSCI (NYSE: MSCI)
- 11:45 - Where do your funds tend to sit in a client's portfolio allocation?
- 12:29 - Where can Australian investors find more information about these funds?
This material has been prepared by Impax Asset Management (Impax) the investment manager of the Impax Global Opportunities Fund (Fund). Impax is exempt from the requirement to hold an Australian financial services licence pursuant to ASIC Class Order CO 03/1099: UK FCA regulated financial service providers, as modified by ASIC Corporations (Repeal and Transitional) Instrument 2016/396. Impax is authorised and regulated in the UK by the Financial Conduct Authority of the UK under UK laws, which differ from Australian laws. Fidante Partners Limited ABN 94 002 835 592 AFSL 234668 (Fidante) is a member of the Challenger Limited group of companies (Challenger Group) and is the responsible entity of the Fund. Other than information which is identified as sourced from Fidante in relation to the Fund(s), Fidante is not responsible for the information in this material, including any statements of opinion. It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. You should consider, with a financial adviser, whether the information is suitable to your circumstances. The Fund’s Target Market Determination and Product Disclosure Statement (PDS) available at www.fidante.com should be considered before making a decision about whether to buy or hold units in the Fund. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. Past performance is not a reliable indicator of future performance. Any projections are based on assumptions which we believe are reasonable but are subject to change and should not be relied upon. Impax and Fidante have entered into arrangements in connection with the distribution and administration of financial products to which this material relates. In connection with those arrangements, Impax and Fidante may receive remuneration or other benefits in respect of financial services provided by the parties. Investments in the Fund(s) are subject to investment risk, including possible delays in repayment and loss of income or principal invested. Accordingly, the performance, the repayment of capital or any particular rate of return on your investments are not guaranteed by any member of the Challenger Group.