Impax Asset Management sees opportunity if AI rally falters

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Impax Asset Management expects to benefit if investors begin retreating from the high-flying tech stocks fueling the artificial-intelligence boom, Bloomberg News reported Sunday, citing Chief Executive Ian Simm.

The $35 billion London-based firm, known for its low-carbon and sustainable strategies, is already seeing early signs of that shift, Simm said. Many asset owners are uneasy about how concentrated the market has become, with the “Magnificent Seven” including Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]), Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]), Apple (AAPL [https://seekingalpha.com/symbol/AAPL]), Alphabet (GOOG [https://seekingalpha.com/symbol/GOOG]) (GOOGL [https://seekingalpha.com/symbol/GOOGL]), Amazon (AMZN [https://seekingalpha.com/symbol/AMZN]), Meta (META [https://seekingalpha.com/symbol/META]) and Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]) now representing nearly half of the Nasdaq 100’s value.

Simm said growing talk of an AI bubble reflects concern that huge sums are chasing technologies whose long-term profitability remains uncertain.

A lot of investors are now seeking broader equity exposure beyond the Mag 7, he told Bloomberg News, adding that the market’s narrow leadership can’t continue indefinitely.

Impax, which struggled last year after losing mandates from clients such as St. James’s Place and BNP Paribas Asset Management, has generally avoided heavy exposure to Big Tech. The firm focuses more on defensive growth, smaller companies and sectors like industrials and materials. Simm acknowledged missing earlier Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]) gains but said that choice has left Impax less vulnerable to a potential tech selloff.

He added that some retail investors are still pulling money without fully considering risk, but institutional clients in Europe are showing renewed interest, particularly as some U.S. managers exit climate alliances.

The firm’s $2 billion Global Environmental Markets Fund is up about 13% this year, with holdings ranging from Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]) and Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]) to Schneider Electric (OTCPK:SBGSF [https://seekingalpha.com/symbol/SBGSF]) (OTCPK:SBGSY [https://seekingalpha.com/symbol/SBGSY]), Xylem (XYL [https://seekingalpha.com/symbol/XYL]) and Waste Management (WM [https://seekingalpha.com/symbol/WM]). Impax’s clean-energy private equity arm is also benefiting as AI-driven data-center demand boosts power needs.

There’s now a shortage of electricity capacity, especially in the U.S., and energy efficiency has become a major investment theme, Simm said to Bloomberg News.

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