Impax slashes jobs after loss of St James’s Place mandate
Impax Asset Management has made 10 per cent of its employees redundant after losing a £5.1bn mandate from St James’s Place.
The 30 layoffs, which Impax said should save over £11m for the firm annually, have occurred over the last six months, the company said in a stock exchange update today.
Job losses resulted from a sharp dip in the firm’s assets under management, which fell to just £28.5bn, down 16 per cent from the start of the year.
“Whilst clearly a difficult process, it supports profitability without damaging future growth prospects,” said Peel Hunt analysts about the redundancies.
Of the £5.5bn decline, £5.1bn was due to the loss of St James’s Place Sustainable and Responsible Equity fund, which the firm had previously managed since 2018.
The mandate was taken away in December and cost Impax around eight per cent of its annual revenue.
“This efficiency programme will broadly neutralise the loss of the St James’s Place revenue,” Impax chief Ian Simm said in a statement this morning.
Due to the losses, Peel Hunt cut its profit estimates for Impax by three per cent for this year, bringing them to just £41m.
St James’s Place began pulling mandates from Impax last year, after its funds consistently underperformed peers.
In addition to the £5.1bn mandate, Impax had co-managed the £9.9bn St James’s Place Global Quality Unit Trust since 2021 alongside five other investment houses, and was dropped after a review in October.
In September, St James’s Place’s annual assessment of value report described the fund as delivering “insufficient value” and returning only 3.5 per cent over the three years before Impax was dropped, compared to a 19.2 per cent growth in competitors.
Despite now losing all of its mandates from St James’s Place, it is still expected to keep bleeding more cash.
Investec is forecasting that investors will have pulled £900m of money from its listed equities arm in this quarter, with £100m of losses in the quarter after, before eventually returning to positive inflows.
Impax’s share price has fallen by more than 62 per cent in the last year, and is down 88 per cent since its peak at the end of 2021.