Water

Water includes investments related to the capture, transportation, storage, treatment, efficient use, and post-use treatment of the resource most critical to human civilization.  Unlike any other commodity, water has no substitute regardless of price.  Huge efficiency gains in water distribution, treatment, use, and reuse must be made to address the growing imbalance between water supply and demand in both developed and developing economies.  The economic value of water will continue to rise as clean water becomes more difficult to source, and the linkage between human health, economic development and resource sustainability is fully realized. The overall water market is generally agreed to be at $400 billion and growing 10-15% per year in developing and 4-6% per year in developed countries.

Drivers

• Supply-Demand-Geographic Imbalance – the world’s population is concentrated in areas without plentiful potable water sources.  This leads to immense pressure on those governments to go to great lengths to provide water for drinking and agriculture.
• Increasing Urbanization and Population – placing ever-increasing pressure on the existing infrastructure and water sources.
• Aging Infrastructure – this is especially true in the United States, and will require massive infrastructure investment from the US government over the next 20 years.
• Stringent Regulatory Environments – creating even higher standards for water quality, while simultaneously reducing the number of available water sources.
• Increasing Privatization and Consolidation – the crucial work required on water infrastructure and processing projects will be performed by private corporations.
• Climate change – could potentially have dire effects on the supply of potable water to the entire world population.  (One specific example is the rapid shrinking of the southern Himalayan glacier, which provides water to 1 billion people).

Areas of Investment Interest

• Treatment and Purification – ultra-pure water and more energy-efficient treatment technologies
• Monitoring and Security – remote, real-time monitoring of water quality throughout the delivery system
• Water Rights – buying, trading water rights or developing projects to unlock “new” water rights
• Reuse and Recycling – increased utilization of wastewater treatment as a new water source, decentralized greywater recycling and reuse
• Sludge Minimization – reducing or utilizing the byproduct from the wastewater treatment process for fertilizer, energy, etc.

Institutional Quality Investment Vehicles

• Private Equity Fund/Project Finance Fund
• Late-Stage Growth Equity
• Water Rights – will be a fund at some point, possible directs for now
• Direct/Co-Investments