St James’s Place: Impax slumps following mandate losses
Impax’s stock price has sunk even further after revealing the damage that the loss of fund management mandates from St James’s Place has done to its business.
Assets under management at the environmental-focused money manager fell eight per cent over the quarter, the firm revealed in a trading update on Thursday.
After falling by more than half over the last year, the group’s stock price dipped a further four per cent today on the back of the news.
Investors have pulled billions from Impax over the last year, as the asset manager struggles with increasing pressure on its shares from short sellers like JP Morgan.
The firm had also been hit by industry consolidation of two Asia Pacific clients, it said today.
As a result of the poor numbers, Investec lowered its forecasts for the company’s full-year adjusted operating profit by between 19 and 26 per cent.
Speaking to Morning Wire in October, St James’s Place chief investment officer Justin Onuekwusi said investors should still expect “a number of changes” to which asset managers control its funds.
St James’s Place began pulling mandates from Impax last year, after its funds consistently underperformed peers.
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 St James’s Place’s annual assessment of value report in September, the fund was described as delivering “insufficient value” and returning only 3.5 per cent over the three years to when Impax was dropped, compared to a 19.2 per cent growth in competitors.
Meanwhile, the sole mandate of the £5.3bn St James’s Place Sustainable and Responsible Equity fund, which Impax has managed since 2018, was taken away from the firm in December.
“There is no doubt that the recent announcement regarding the loss of the SJP mandate was a blow, and current market conditions remain challenging,” said Peel Hunt analysts. “However, our view is that the share price has overreacted.”
The analysts added that the firm currently trades on a price to earnings ratio of just nine, and valuation stands at just one per cent of assets under management, more than half of its long-term average.