Investment trust insider on Impax Environmental Markets – James Carthew: why no environmental rival for Impax?
A couple of weeks ago I highlighted the attractions of Home (HOME) real estate investment. I was pleased to see it raised £240m in its flotation and I hope it will end up being a lot bigger in a few years’ time.
Shares in Home Reit started trading yesterday and offer the dual pleasure of being able to invest in something that offers an attractive return and a chance to feel that you are doing something worthwhile with your money.
Another trust that presents a similar opportunity is Impax Environmental Markets (IEM). It has been three years since I reviewed IEM for this column. Back in October 2017, the trust had a market value of about £450m. It has doubled since then, returning 10.6% a year in net asset value, eliminating its discount and issuing a substantial amount of stock.
For me, one of the strangest things about IEM’s success is that nobody has made a serious go of competing with it. IEM dominates the AIC’s Environmental sector. Jupiter Green (JGC) has a market capitalisation of just £39m and its NAV returns have lagged IEM by 2.5% a year for 10 years. Menhaden (MHN) has been around for more than five years and its shares still trade lower than its issue price.
If we were drawing Venn diagrams, the sorts of things that IEM invests in touch on the activities of investments in the renewables sector (both the power generation businesses and the energy efficiency trusts) and the infrastructure securities sector where Ecofin Global Utilities and Infrastructure (EGL) and Premier Global Infrastructure (PGIT) reside.
However, there are many stocks in IEM’s portfolio that you are unlikely to find anywhere else…. read more here