Impax Asset Management: Shorting the non-environmentalists
"We’re not looking to quantify the social aspect of our business"
Impax Asset Management has 13 years of experience in environmental finance. Since early 2003, its long-only funds have produced average annual returns of 20%. The firm also has private equity investments in environmental projects. In May 2007, the firm opened its first hedge fund, launching the Impax Absolute Return Fund. "We’d been long-only for many years, and we noticed that stocks in our sector and the related energy and utilities sectors were becoming fully valued or overvalued, and, therefore, made good short candidates," says Ian Simm, CEO of Impax.
"From a hedge fund perspective, as environmental stocks become larger and more liquid, they become more appropriate for shorter-term trading strategies. And if you have an information edge, and a specialist strategy, this long/short space is ideal."
Although most hedge funds investing in environmental technology stocks will claim some moral aspect to what they do, Simm says Impax is agnostic.