Weinstein's Hedge Fund Targets Impax Amid Disappointing Performance
Saba's Hedge Fund Takes Aim at Impax Environmental Markets
London-based Saba Capital Management, a hedge fund led by Boaz Weinstein, is escalating its battle against one of the UK's most high-profile environmental investment trusts, Impax Environmental Markets (IEM). Saba has raised its stake in IEM to nearly 30% and has announced plans to oust the trust's board, targeting Impax Asset Management, a leading sustainable investing firm that has managed IEM since its launch in 2002.
According to James Carthew, head of investment companies research at QuotedData, Saba's move is a significant blow to Impax, which has struggled to navigate rising interest rates and missing out on the surge in Big Tech valuations. Impax's market value has slumped by over 90% since its 2021 peak, with the asset manager now managing about £22 billion in assets, down from a peak of £41.4 billion in December 2021.
Comparison of Impax's Market Value
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
| Year | Impax Market Value |
|---|---|
| 2021 | £41.4 billion |
| 2022 | £22 billion |
| 2021-2022 | -46.3% |
Saba's strategy is part of a broader approach to target UK investment trusts with share prices below the net asset value of the underlying assets. However, its campaign against IEM stands out, according to Carthew, as it undermines efforts to pursue sustainable strategies and removes the choice from investors in the investment companies market.
Impax's chief executive, Ian Simm, had previously indicated that the worst was over after clients pulled $14 billion, but the asset manager has continued to struggle. In early April, Impax revealed net outflows of £2 billion ($2.7 billion) for the quarter ending March 31, with the firm now holding about £200 million in total net assets for IEM.
Timeline of Impax's Assets Under Management
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
| Date | Assets Under Management |
|---|---|
| December 2021 | £41.4 billion |
| March 31, 2022 | £22 billion |
| April 2022 | £20.2 billion (after £2 billion outflows) |
| Current | £200 million (IEM assets) |
Hawksmoor Investment Management was among IEM shareholders to offload its stake last month, with Robert Fullerton, senior investment analyst at Hawksmoor, stating that the expectation now is that Saba will take the mandate from Impax and then seek to run IEM itself. If Saba takes the IEM investment mandate, it would follow a playbook established with its handling of Edinburgh Worldwide Investment Trust Plc., which is currently managed by Baillie Gifford & Co.
Investor Takeaway
Investors should be cautious of potential changes in the Impax Environmental Markets trust due to Saba Capital Management's efforts to oust the board.
More in Market
Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Indian Stocks to Watch: BHEL, Agarwal Industrial, JBM Auto, Rajesh Exports, Indian Energy Exchange, Lenskart Solutions in Market Focus on June 4.
