Impax Environmental Markets assets dip while holding out hope for ‘resurgent M&A’
Impax Environmental Markets has reported a 0.5 per cent decline in the net asset value (NAV) of the trust over the six months to 30th June.
The investment trust reported a NAV of 429.3p at the end of June, compared to 434.9p as of 31 December 2023.
The company, which is the UK’s largest environmental markets investment trust, said it had been impacted by investors’ preference for larger tech stocks over the period. Meanwhile, the assets preferred by Impax, which tend to be small and medium-sized companies that generate more than 50 per cent of revenue from environment markets, have struggled.
Impax noted that mid and small-caps had “suffered disproportionately from the ‘higher and for longer’ interest rate environment,” underperforming their large cap counterparts by over eight per cent in the last six months.
Despite the problems, the Impax trust said that the rise in M&A over the last six months provided an attractive opportunity for the trust, noting Canadian investment group Brookfield acquiring France’s Neoen and private equity group KKR buying Germany’s ENCAVIS.
The trust has started to benefit as a result. In June, Terna Energy announced that it was being taken private by Masdar, an Abu Dhabi owned renewables developer, seeing its takeover price almost double where Impax got in four years ago.
Glen Suarez, chair of Impax Environmental Markets, said: “With upcoming worldwide elections, changing trade policies, continuing conflicts and interest rate cut uncertainty, and the current trend of investor demand pushing investment trusts to discounts, the second half of 2024 will continue to present challenges and opportunities for Impax Environmental Markets.”