Impax set to benefit from environmental stimulus

The company's objective is to enable investors to benefit from rapid and sustained growth anticipated in the markets for cleaner or more efficient delivery of basic services of energy, water and waste. Investments are made predominantly in quoted companies which are active in three environmental markets: alternative energy and energy efficiency, water treatment and pollution control, and waste technology and resource management.

The portfolio will include a variety of companies within the three sectors, from wind turbine manufacturers and biofuels, to water infrastructure companies and air pollution control technologies, to recycling equipment and environmental consultancy companies.

Impax selects companies on the basis of their potential for generating capital growth.

Portfolio manager Bruce Jenkyn-Jones points out that new legislation, particularly in the US and increased visibility on the substantial environmental components of government stimulus packages have underpinned an improvement of investor sentiment for stocks, as evidenced by a number of successful rights issues.

In the first four months of 2009, Mr Jenkyn-Jones sought to selectively increase weightings in early-cycle companies, higher beta companies and those companies well positioned to benefit from global stimulus packages. Simultaneously, he selectively reduced holdings in defensive holdings which have outperformed.

Having generally traded at a premium since the middle of 2005, the share price has traded at a discount to net asset value (NAV) since the market upheaval in the middle of 2008. This discount has widened in recent months and the board has responded by buying in shares. As a result, the share price discount to NAV at 5 June had narrowed to 3 per cent.

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