How to play the world’s water shortage.
Investors can follow the lead from Dr Michael Burray, the GFC-predicting protagonist from Michael Lewis’s The Big Short, and invest in one of the world’s most urgent themes: water.
In China, 80 per cent of rivers are too toxic for fish; in the United States, Californian authorities spend about $US20 billion annually on their water supply and here in Australia, there is $30 billion water trading market, thanks to agricultural reforms in the mid-2000’s.
Share on Facebook SHARE Share on Twitter TWEET Link Water scarcity is proving a lucrative global theme, combining a demographic trend with the threat of climate change.
$US7.5 trillion ($10.1 trillion) is the projected global spend in water infrastructure over the next 15 years, according to the World Economic Forum, and as international regulation is tightened, $US300 billion is slated to address water pollution by China’s Water 10 plan.
"And businesses are focused on things from smart irrigation to maintaining drinking quality to water distribution efficiency and huge dam engineering projects, mean there are hundreds of entry points for investors."
Ways to invest Impax has invested $2.9 billion into around 40 water global water stocks, largely focused on infrastructure and water utility plays, and since the fund’s inception in 2009 has returned 13.4 per cent to shareholders.
Mr Simms points to the likes of French multinational SUEZ, American Danahar Corporation and Swiss Georg Fischer as large and diversified firms capitalising on the voracious demand for water infrastructure and new technologies.
Brisbane-based Blue Sky Alternative Investment fund has $2.7 billion under management and actively trades water rights in the Murray Darling.
"Anything that looks to contribute solutions to China’s extremely serious water issues is likely to receive investor interest," says Tom King, chief investment officer of Nanuk Asset Management.