Interim Management Statement

Impax Environmental Markets plc (the 'Company')
                    Interim Management Statement
              For the four months ended 31 October 2008

This interim management statement covers  the period from the 1  July
2008 to 31 October  2008, and is prepared  in accordance with the  UK
Listing Authority's Disclosure and Transparency Rule 4.3.

Investment objective and policy

The Company's objective is to enable investors to benefit from  rapid
and sustained growth anticipated in  the markets for cleaner or  more
efficient delivery  of  basic services  of  energy, water  and  waste
("Environmental Markets").  Investments  are  made  predominantly  in
quoted companies  which provide,  utilise, implement  or advise  upon
technology-based  systems,  products  or  services  in  Environmental
Markets,  particularly  those  of   alternative  energy  and   energy
efficiency,  water  treatment  and   pollution  control,  and   waste
technology and resource management.

Performance

The last four months have been characterised by the ongoing crisis in
the   financial   markets,   culminating   in   global   Governmental
intervention  to  increase  liquidity  and  restore  confidence,  and
significant consolidation in  the financial sector.   Strains in  the
financial markets have spilt over  into economies, many of which  are
now widely acknowledged to be in recession.  The Company has not been
immune to challenging macro conditions.

During the period from  1 July until 31  October 2008, the  Company's
diluted Net Asset Value ("NAV") per Ordinary Share (excluding current
year  net  revenue)  fell  by  28.0%  from  123.1p  to  88.6p,  under
performing the MSCI World Index and  the MSCI World Small Cap  Index,
which fell  15.8%  and 19.3%  respectively  during the  period  (both
priced in  pounds sterling).   The  shares continued  to trade  at  a
modest premium to NAV for much of the period.

The underperformance  of  the  Company can  partly  be  explained  by
weakness in renewable energy related  stocks that derated during  the
period but also  reflects the  intrinsic nature  of an  Environmental
Markets  portfolio  that  has   an  overweight  position  to   stocks
classified as  basic  materials  and  industrials  (weak  during  the
period) and zero exposure to healthcare and consumer staples  (strong
during the period).  In addition, the  US dollar strengthened  versus
the pound by 20% over the period, with negative relative implications
for the portfolio,  which is underweight  US companies compared  with
world indices.   Market volatility  was  also pronounced,  driven  by
widespread redemptions and de-leveraging in equity markets.

Over the year to date the NAV  has fallen 30.7% against a decline  in
the MSCI World Index of 26.0% and  in the MSCI World Small Cap  Index
of 27.5%.

Material Events

The Manager has sought to increase weightings in defensive  companies
with good  visibility of  earnings, balance  sheet strength  and  low
valuations.  In  addition,  the  Manager  is  selectively  increasing
holdings in companies  with early cycle  construction bias which  are
currently trading on very low valuations and should perform  strongly
as markets anticipate economic recovery.

The portfolio composition has  changed since 30  June 2008 to  favour
companies with better visibility  of earnings and lower  valuations.
The top ten holdings as at 31 October 2008 are set out below.


Company              Activity                  % of net assets
Clean Harbors        Hazardous waste                3.4%
Clarcor Inc          Filtration                     2.7%
Pentair              Water treatment                2.6%
Regal Beloit         Electric motors                2.6%
Pall Corp            Filtration                     2.5%
Stericycle           Clinical waste management      2.5%
Covanta Holding Corp Waste management               2.3%
Kurita Water         Water treatment                2.1%
Ormat                Geothermal power               2.0%
Vacon                Power electronics              2.0%


With IPO  markets  effectively closed  at  present, the  Manager  has
completed  a  number  of  follow-on  investments  in  the   Company's
portfolio of "late  stage" unquoted  investments and  is also  seeing
strong new deal flow.   As at 31  October 2008, unquoted  investments
represented 6% of the Company's net assets.

Articles of Association

The resolution to adopt new Articles of Association ("Articles")  was
passed by  shareholders at  a General  Meeting held  on 30  September
2008.  The  new Articles  were  prepared solely  in response  to  the
implementation of  the  Companies  Act 2006  and  other  changes  and
developments in the law and practice applicable to the Company  since
it was formed in 2002.

Outlook

At the time of writing, the Q3 2008 earnings reporting season is now
in full swing and a majority of portfolio companies is either meeting
or beating expectations.  The portfolio is valued with a PE of 10
(based on expected earnings over the next twelve months), which is at
the bottom end of the historic range.

Throughout the financial crisis, environmental issues have remained
high on the political agenda; in particular, the election of
President Obama is expected to herald a new wave of environmental
regulation in the US, which will benefit portfolio companies.
Although the Company is not immune to the economic cycle, the Manager
believes that there is a strong element of secular growth in
Environmental Markets, which should allow the portfolio to
out-perform, even in a recessionary environment.

The interim management statement will be made available on the
Manager's website www.impax.co.uk

10 November 2008

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