The new Environmental Leaders fund, launched on 3 March, will invest in companies focused on developing and offering products and services in the environmental sector, including those establishing leading environmental divisions to position themselves as major players in the sector.

Impax believes environmental investment to be ‘the most compelling secular growth story of the 21st century’.

The fund is managed by Ian Simm, Bruce Jenkyn-Jones and Simon Gottelier, who have a ten-year track record of managing funds focused exclusively on the environmental sector.

Min. investment: £1,000
Initial charge: 5%
Annual mngmt fee: 1.5%
Contact: www.impax.co.uk

Philip Johnson says :
This fund aims to provide superior long-term capital growth and income by investing in companies developing products and services to mitigate and solve some of the world’s most pressing environmental problems. It joins the band of other ‘eco funds’ that have recently been introduced.

In particular, the fund will focus on three key environmental subsectors: alternative energy and energy efficiency; water treatment and pollution control; and waste technologies and resource management. Unlike current Impax funds, which are predominantly focused on the small-cap sector, this new fund will invest globally in quoted companies with a market capitalisation of at least US$500 million.

These companies must derive at least 20 per cent of their revenues or profits from, or have at least 20 per cent of their capital invested in, the environmental sector.

However, many of the companies in the portfolio will have a much larger proportion of their revenue derived from the environmental sector.

Since the start of 2008, there has been a significant market correction and concerns about economic slowdown. However, there have also been several positive developments in the environmental market, particularly EU legislative proposals aimed at achieving 20 per cent of energy production from renewable sources, a 20 per cent cut in greenhouse gas emissions and a 20 per cent increase in energy efficiency by 2020. This suggests potential growth for companies operating within the environmental sector.

Further evidence supporting the ‘eco’ investment case is that in the US, environmental issues are a prominent battleground in the presidential campaign, as key candidates from both sides have expressed their support for climate change policies and support for renewable energy. While this fund might make a compelling case for investors’ money, I would suggest investors take a look at all the funds available before diving in. A number of good alternatives now exist, so it is a matter of considering all the available options.

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