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Investing for water


Exponential needs, pollution, chronic drought… All these elements obviously raise the question of access to water, a future thematic, for which we estimate needs will grow at 10% per year for the next 20 years.

Water, a major challenge in the coming decades

Demographic growth and improving living standards have resulted in water consumption doubling in the last 30 years throughout the world, whether for agriculture, industry or households. Water is a rare resource for which demand will continue to grow both in emerging and developed countries. The latter are faced with the obsolescence of their water treatment and supply infrastructure and will therefore have to make heavy investments. Agricultural production requires large quantities of water and the increase in consumption as the world’s population grows will lead to making water more expensive. Finally, climate change is causing both droughts and flooding to worsen and is increasing water scarcity. All these factors make water a major imperative as well as being catalysts for growth for the water sector over the long term.

What solutions do we have for water today?

Several initiatives need to be put in place to resolve the problems discussed above and to provide access to water for as many people as possible:

  • equip emerging countries with modern water treatment and supply facilities
  • cut down on the amount of water used in agricultural livestock and crop production
  • make existing water conveyance networks more efficient to avoid water loss in older cities (such as London and Mexico) where the systems have become dilapidated
  • improve waste water and sewage treatment
  • limit pollution of the water tables

Companies active in these different water domains should therefore directly benefit from such initiatives.

Water, the source of all growth

Parvest Aqua is an equity fund invested in the stocks of international companies whose business is related to the water sector. This includes in particular: water treatment, saving and recycling technologies, the installation, maintenance and renovation of water conveyance networks, and water sanitation and decontamination. Such companies are prospering in both emerging and developed countries, and provide investors with a balanced mix of small capitalisation companies that are often innovative players, and large cap companies that are often well-established players.

A word from the fund manager

“An increasing number of (water-related) needs are showing up due to global warming and this should support the long-term performance of the fund’s asset class. The investment choices behind Parvest Aqua favour mid-cap technology and growth stocks; that’s what characterises this fund and makes it an attractive, value creation fund.”

Fund management team, Impax Asset Management.

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