Impax Q2 AUM Update: Assets Drop 8% to £22.3bn Amid Net Outflows, Revenue Forecast Lowered

Impax Q2 AUM: 8% Down To £22.3bn, Flows Still Tough, Revenue Guidance Trimmed

Impax Asset Management has reported a tougher second quarter, with assets under management (AUM) falling 8.0% over three months to £22.3 billion as at 31 March 2026. Net outflows continued, mainly from a small number of institutional clients, while market performance was modestly positive. Management has also guided revenue for the financial year to £109 million – £113 million and flagged further efficiency measures.

If you invest in fund managers, this is one to read closely. AUM drives fee revenue, and the update gives clear colour on where pressure is coming from and what might change the trend.

Key numbers from Impax’s Q2 AUM update

Metric	Figure
Total AUM at 31 December 2025	£24,240m
Net flows (Q2)	£(2,011)m
Performance, market movement and FX (Q2)	£83m
Total AUM at 31 March 2026	£22,312m
Quarterly AUM change	Down 8.0%
AUM that outperformed during the quarter	63.4%
FY revenue guidance	£109m – £113m

Asset class breakdown: listed equities under pressure, private markets steady

• Listed equities AUM fell to £19,342m (from £21,222m), with net outflows of £1,964m partly offset by a small positive performance contribution of £84m.
• Fixed income AUM slipped to £2,329m (from £2,385m), with net outflows of £53m and a £3m negative performance and FX impact.
• Private markets AUM edged up to £641m (from £633m), helped by £7m of net inflows and £1m of performance and FX.

Translation: the outflows are concentrated in listed equities, which is typical when sentiment is cautious toward active, thematic strategies. Private markets held up comparatively well.

Flows vs performance: signs of life, but flows lag

Impax notes that 63.4% of AUM outperformed during the quarter, despite some recent market turbulence. The contribution from markets and FX was +£83m, which is a modest tailwind relative to the starting AUM (roughly +0.3% by my maths). The bigger swing factor was client money moving out: net outflows of £2,011m across the firm.

Management’s read is straightforward. Many asset owners make allocation decisions on one year plus numbers, and after a tough three-year spell for active thematic managers, the improvement in near term performance has not yet fed through to client behaviour. The wholesale channel – think financial advisers and platforms – is stabilising, with lower net outflows and an improving trend via Impax’s largest distribution partner. The institutional side is where the redemptions are concentrated.

IEM exit tender: a known headwind, with a mitigation plan

Impax flags a near term hit from the Exit Tender at Impax Environmental Markets plc (IEM). The company expects this process will lead to the loss of most of the assets it currently manages in that investment trust. To soften the blow, Impax plans to offer investors a switch into an equivalent Impax UCITS fund run by the same team, aiming to retain a meaningful percentage of those assets.

In plain English: expect AUM linked to IEM to step down when that process concludes. Some of those assets may be recaptured if investors choose the like for like fund alternative, but the outcome depends on client choices.

Revenue guidance and costs: belt tightening in progress

Following recent net outflows and the IEM related uncertainty, Impax now expects revenue for the financial year to land between £109m and £113m. That sits with the lower average AUM through the period. Management says it is taking further steps to improve operating efficiency, but specifics are not disclosed.

For shareholders, the message is clear. With revenue under pressure, cost discipline matters. Any update on the scope and timing of efficiency actions will be worth watching.

Why this matters for investors in Impax

• AUM is the revenue engine: The quarter shows how sensitive fee income is to flows. Net outflows of £2.0bn overwhelmed a small performance gain. Until flows stabilise, revenue growth is constrained.
• Early signs of performance repair: With 63.4% of AUM outperforming, the investment backdrop is improving for Impax’s style. If that persists, it can help flows with a lag as one year plus numbers get better.
• Channel mix is shifting: Wholesale outflows are easing, which is encouraging for future breadth of distribution. Institutional redemptions remain the swing factor for near term AUM.
• Known event risk in IEM: The Exit Tender is likely to reduce AUM in the near term. The UCITS switch plan could retain some assets, but quantum not disclosed.
• Long term thesis intact: Management highlights strengthening fundamentals across renewable energy and energy efficiency – themes central to Impax’s strategies.

Positives and negatives at a glance

Positives

• 63.4% of AUM outperformed during the quarter, a notable improvement following a challenging period for thematic strategies.
• Wholesale channel shows an improving trend via the largest distribution partner, with lower net outflows.
• Private markets saw small net inflows and positive performance.

Negatives

• Total AUM down 8.0% quarter on quarter to £22.3bn, driven by £2.0bn of net outflows.
• Revenue guidance trimmed to £109m – £113m, reflecting lower average AUM and external uncertainties.
• IEM Exit Tender expected to remove most of the assets Impax manages for that trust.

What to watch next quarter

• Net flow trend by channel: Do wholesale flows turn positive and do institutional redemptions slow.
• IEM outcome: How many assets are lost, and how much is retained via the UCITS switch.
• Performance persistence: Does the proportion of AUM outperforming stay above 50% and start to feed into one year plus numbers.
• Cost efficiency detail: Timing and magnitude of the operating efficiency steps referenced by management.

My take: short term headwinds, improving setup if performance holds

This update is a mix of pressure today and potential relief tomorrow. The headline is unavoidably soft – AUM down 8.0%, significant net outflows, revenue guidance narrowed lower, and a known IEM headwind to come. That will keep the near term narrative cautious.

But the underlying setup is improving. A majority of AUM outperformed despite choppy markets, wholesale distribution is stabilising, and the strategy backdrop in renewables and efficiency remains supportive. If the performance trend sticks, flows tend to follow – with a lag. In the meantime, watch how much of the IEM AUM Impax can retain and whether cost actions protect profitability while the recovery in flows beds in.