Jon Forster is stepping down as co-manager of Impax Environmental Markets (IEM).
Forster will step back at the end of the year to become a senior industrials analyst at Impax Asset Management focused on environmental solutions companies. He will continue to contribute investment ideas for the portfolio.
Jon is replaced by Sanjeev Lakhani, who joined Impax in 2023 as a senior industrials analyst researching stocks for the investment trust. Lakhani was previously an assistant portfolio manager at Highclere International Investors, where he also covered industrials and utilities as an analyst. Before that, he was an investment manager at Janus Henderson.
He will work with Fotis Chatzimichalakis, co-manager on the trust since 2021, who said he was delighted Lakhani was joining the team at an important time. “IEM’s portfolio has evolved significantly this year, and his ideas have played a key role in that. With a more concentrated portfolio of high conviction, attractively valued ideas, IEM is well positioned to go forward.”
IEM chair Glen Suarez thanked Forster for his service and announced IEM would immediately adopt a new performance benchmark, the Solactive Global Environmental Markets Specialists, or “GEMS”, index. It replaces the FTSE ET100, which he said had become unrepresentative of IEM’s opportunity set since FTSE’s Environmental Markets methodology diverged from that of Impax in 2021.
“As a board, we identified the need for a more appropriate benchmark to reflect the company’s thematic investable universe in IEM’s last annual report. Having consulted with shareholders, we are confident that the GEMS index will fulfil this role. This will give the manager a clear reference for portfolio construction, risk management and performance attribution,” Suarez said.
QuotedData’s James Carthew said “Impax Environmental Markets’ new benchmark covers stocks in the environmental services, environmental control and treatment products, environmental infrastructure, waste management services, and metal recycling sectors. There is a 5% cap on the largest weight in the index. The spread of sectors is not a perfect match to IEM’s remit, which also includes companies operating in the sustainable agriculture and digital infrastructure, for example. However, it should be a more useful yardstick than the FTSE ET100 Index, 10% of which is Tesla and 10% is Taiwan Semiconductor Manufacturing (TSMC). Regardless, IEM will continue to have a relatively high conviction (about 50-60 holdings) approach and a high active share (deviation from the benchmark).”
IEM shares are trading at a 10.2% discount to net asset value. Following a blowout performance during the Covid pandemic, when it returned 51% in the 12 months to 31 August 2021, the trust gave back part of this over 2022/23, when its growth and small cap focus faced the headwind of rising interest rates. Over five years, the NAV has returned 33.6% and the widening discount means that the shares have returned 17.9%.
Following the wind-down of rival trusts run by Jupiter and Menhaden, IEM is the UK’s only listed fund with an environmental solutions remit. At the company’s triennial continuation vote in May, it received the backing of 89.6% of shareholder votes.
