CLSA Capital launches water and waste fund
CLSA Capital Partners is launching an investment fund focusing on Asian water and waste management companies, with plans to cash in on the billions of dollars in new infrastructure planned across the region over the coming years.
Securing and managing clean waters supplies is becoming a big business in Asia, particularly in the parched northern part of China.
Governments are also preparing to increase spending on reducing pollution, managing waste and turning waste into energy.
'We felt that water and waste is particularly definable and durable as a segment of the market. We'll have a particular focus on China and India, although it is an Asia-Pacific fund,' said Andrew Pidden, a co-principal of the fund.
China has allocated US$132 billion to water infrastructure, wastewater treatment and irrigation over the 2006-10 five-year plan, hoping to address the country's chronic water shortages.
The country has 22 per cent of the world's population but only 7 per cent of its water supplies, and the water table near Beijing is dropping dangerously low.
Water and waste have traditionally been government-funded sectors, but this is changing as financiers look for new investment opportunities and governments try to find more efficient ways to deliver basic services. That creates investment opportunities in the private sector.
CLSA is hoping the water fund, which officially began accepting funds today will raise US$200 million by the end of next year, and it will close the fund at US$400 million.
The fund will invest in both listed firms and private equity deals.
It will be co-managed by Mr Pidden and Anthony Wilkinson, who also run CLSA's Clean Resources Asia fund, which includes exposure to the water and waste sectors, and has generated a return of 35.7 per cent return since its launch on August 7.
Mr Pidden's target for the water fund is an annualised return of 20 per cent.
Minimum subscription for the fund is US$1 million.
Lyxor Asset Management sells the Dynamic Water Fund to retail investors, requiring a minimum investment of US$3,000.